AMERICAN DEPOSITORY RECEIPTS (ADR) is ownership in the shares of a non-U.S. company that trades in U.S. financial markets. The stock of many non-US companies trade on US stock exchanges through the use of ADRs. ADRs enable U.S. investors to buy shares in foreign companies without the hazards or inconveniences of cross-border & cross-currency transactions. ADRs carry prices in US dollars, pay dividends in US dollars, and can be traded like the shares of US-based companies.
ACCRUED INTEREST is interest earned but not paid since the last due date.
EXTENSION RISK, with mortgage-backed securities, is the risk that rising interest rates will slow the prepayment of underlying mortgages and extend the maturity.
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