International Financial Management 6th Edition by Sanjiv Eun, Cheol Resnick, Bruce Sabherwal

تمرين 1

On the Tokyo Stock Exchange, Honda Motor Company stock closed at ¥2,717 per share on Thursday, July 29, 2010. Honda trades as and ADR on the NYSE. One underlying Honda share equals one ADR. On July, 29, 2010, the ¥/$ spot exchange rate was ¥86.7750/$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 $30.96. Do you think an arbitrage opportunity exists