Use the Information for the Question(s)below

question 54

Multiple Choice

Use the information for the question(s) below.
An exchange traded fund (ETF) is a security that represents a portfolio of individual stocks.Consider an ETF for which each share represents a portfolio of two shares of International Business Machines (IBM) ,three shares of Merck (MRK) ,and three shares of Citigroup Inc.(C) .Suppose the current market price of each individual stock are shown below:
-An American Depository Receipt (ADR) is a security issued by a U.S.bank and traded on a U.S.stock exchange that represents a specific number of shares of a foreign stock.Siemens AG has an ADR that trades on the NYSE and is equivalent to one share of Siemens AG trading on the Frankfurt Stock Exchange in Germany.If semens trades for $95.19 on the NYSE and for €64.10 on the Frankfurt Stock Exchange,then under the law of one price,the current exchange rate is closest to:

• A)$0.6744/€.
• B)€0.6734/$.
• C)€1.4850/$.
• D)$1.5274/€.

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