Determining an Arbitrage Opportunity

Determining an Arbitrage Opportunity

Go to https://www.adr.com/Investors/Markets (Links to an external site.)Links to an external site.. Look up the price of a Honda ADR. Next, look up the price of a share of Honda stock on the Tokyo Stock Exchange. Next, look up the exchange rate of Yen/Dollar. Address the following questions:

At the current exchange rate, what is the no-arbitrage U.S. dollar price of one ADR?

When comparing the Honda ADR to the price of a share of Honda stock priced in Yen, does an arbitrage opportunity exist?

If you were to develop a plan to make a trading profit,

Provide calculations where necessary to support your answer. Summarize your findings in a two page paper, not including title and references pages. Be sure to properly cite your resources using APA style.

The Week 4 Assignment

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Must be two double-spaced pages in length, and formatted according to APA style as outlined in the Ashford Writing Center.
Must include a title page with the following:
Title of paper
Student’s name
Course name and number
Instructor’s name
Date submitted
Must begin with an introductory paragraph that has a succinct thesis statement.
Must address the topic of the paper with critical thought.
Must end with a conclusion that reaffirms your thesis.
If you use references, you must document all sources in APA style, as outlined in the Ashford Writing Center.
Must include a separate references page, formatted according to APA style as outlined in the Ashford Writing Center.

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