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Introduction to Financial Markets (405) — CBSE Class 10 board question

Q1. [1] § 3.2 Foreign Capital Issuance
What do you understand by 'Global Depository Receipts'?
Previously asked in CBSE board exam
2023 92 Q5 (ii)
Generated by claude-sonnet-4-6 · 2026-06-15 07:07 · grounding rag
Model Answer

Global Depository Receipts (GDRs) are negotiable certificates that allow an issuer to raise capital simultaneously in two or more markets through a global offering, where each GDR typically represents a fixed number of underlying company shares (e.g., 1 GDR = 10 shares).

Source: Foreign Capital Issuance, chapter 3

Explanation

For a 1-mark question, just define GDR in one clear sentence. Key terms examiners look for: negotiable certificate, raise capital in two or more markets, and optionally the fixed ratio of GDR to underlying shares. Avoid writing more than 2 lines.

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