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.dollar 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.The no-arbitrage U.S.price of one ADR is
A) $4.87.
B) $5.87.
C) $6.87.
D) $7.87.
Correct Answer:
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