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alexira [117]
1 year ago
6

In the London market, Rolls-Royce stock closed at £0.875 per share. On the same day, the British Pound sterling to the U.S. doll

ar spot exchange rate was £0.6366/$1.00. Rolls Royce trades as an ADR in the OTC market in the United States. Five underlying Rolls-Royce shares are packaged into one ADR. If the Rolls Royce ADRs were trading at $5.75 when the underlying shares were trading in London at £0.875, ignoring transaction costs, the arbitrage trading profit would be A. $0.00. B. $1.12. C. $2.12. D. $3.12.
Business
1 answer:
frutty [35]1 year ago
5 0

Answer:

B. $1.12

Explanation:

The computation of arbitrage trading profit is shown below:-

Euro Share price = £0.875

Spot rate R = £0.6366/$1.00

1 ADR Share price in US = $5.75

1 ADR = 5 share of shares

Now, The actual price of 1 ADR P1 = 5 × Euro Share price ÷  Share price in US

= 5 × £0.875 ÷ £0.6366

= $6.87

Therefore, The  Arbitrage profit = Actual price - trading price

= Actual price - Price in US

= $6.87 - $5.75

= $1.12

Therefore for computing the arbitrage trading profit we simply applied the above formula.

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Answer:

$13,000

Explanation:

<em>Rune Co.'s</em>

<em>As of December 31</em>

Balance as per Bank Statement $10,000

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2 years ago
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When the company is hosting an event, managers should assign event preparations to a ________. Preparations include trucking in
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Cross functional team / will increase

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1 year ago
Ryan always skims through his lesson before a test. What is he doing by skimming?
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D. Reading everything very quickly
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On a bank's T-account, which are part of the bank’s assets? a. both deposits made by its customers and reserves b. deposits made
avanturin [10]

Answer:

The correct answer is C

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Therefore, the reserve is a part of bank asset whereas the deposits will not be a part of bank asset.

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At an activity level of 8700 machine-hours in a month, Falks Corporation's total variable production engineering cost is $728,19
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Answer:

$109.80 per unit

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1 year ago
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