Assume Nestle is trading for SF100 in Zurich and Nestle ADRs (with 2 ADRs per share) are trading for $40 on the New York Stock Exchange. To prevent arbitrage, what is the relevant US $/SF spot exchange rate?
A) 0.8
B) 1.0
C) 1.25
D) 4.0
E) Undetermined
Correct Answer:
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