In the London Market, Rolls Royce Stock Closed at £0

question 12

Multiple Choice

In the London market, Rolls Royce stock closed at £0.875 per share on Thursday, April 17, 2003. Rolls Royce trades as an ADR in the OTC in the United States. Five underlying Rolls Royce shares are packaged into one ADR. On April, 17, 2003, the British Pound sterling to the U.S. spot exchange rate was £0.6366/$1.00.
-The no arbitrage U.S.price of one ADR is:

• A) $4.87.
• B) $5.87.
• C) $6.87.
• D) $7.87.

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