On the Milan bourse, Fiat Chrysler stock recently traded at €13.82 per share. Fiat Chrysler also trades as an ADR on the NYSE. One underlying Fiat Chrysler share equals one ADR. If the $/€ spot exchange rate was $1.12/EUR1.00, what is the no-arbitrage U.S. dollar price of one ADR?

On the Milan bourse, Fiat Chrysler stock recently traded at €13.82 per share. Fiat Chrysler also trades as an ADR on the NYSE. One underlying Fiat Chrysler share equals one ADR. If the $/€ spot exchange rate was $1.12/EUR1.00, what is the no-arbitrage U.S. dollar price of one ADR?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

On the Milan bourse, Fiat Chrysler stock recently traded at €13.82 per share. Fiat
Chrysler also trades as an ADR on the NYSE. One underlying Fiat Chrysler share equals
one ADR. If the $/€ spot exchange rate was $1.12/EUR1.00, what is the no-arbitrage
U.S. dollar price of one ADR?

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Option c is not correct

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