On the Tokyo Stock Exchange, Honda Motor Company's stock closed at ¥2,907 per share on Monday, June 6, 2016. Honda trade

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899603
Joined: Mon Aug 02, 2021 8:13 am

On the Tokyo Stock Exchange, Honda Motor Company's stock closed at ¥2,907 per share on Monday, June 6, 2016. Honda trade

Post by answerhappygod »

On the Tokyo Stock Exchange, Honda Motor Company's stock closed
at ¥2,907 per share on Monday, June 6, 2016. Honda trades as an ADR
on the NYSE. One underlying Honda share equals one ADR. On June 6,
2016, the ¥/$ spot exchange rate was ¥107.57/$1.00.
a. At this exchange rate, what is the no-arbitrage U.S. dollar
price of one ADR?
b. By comparison, Honda ADRs traded at $27.18. Do you think an
arbitrage opportunity exists?
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Top
Post Reply

Return to “Archived Questions & Answers”