Q.Explain the following term/concept.
Overdraft

The underlined "short" is wrong; a bond is a source of long-term finance.

A bond is a debt security issued by a company or government acknowledging a loan and promising to repay the principal after a fixed period along with interest. Its features:

• It is a form of borrowed capital, much like a debenture. …

The statement is True. Under a Global Depository Receipt (GDR) arrangement, a depository bank holds the underlying shares on behalf of the GDR holders.

A Global Depository Receipt (GDR) is an instrument used by companies to raise funds from foreign investors. It is a receipt representing a fixed number of the company’s shares.

• The company’s shares are deposited with a domestic custodian bank, and a foreign depository bank issues the receipts (GDRs) against them to overseas investors. …

The correct option is international. A GDR is a route for an Indian company to raise capital from foreign investors.

A Global Depository Receipt (GDR) is a negotiable instrument issued by an overseas depository bank against the shares of an Indian company kept with a domestic custodian. Foreign investors buy these receipts, and in this way the company raises funds from investors located outside India. The very purpose of a GDR is to reach beyond the home market and attract capital from many countries at once.

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