Assume Nestle Is Trading for SF100 in Zurich and Nestle

question 23

Multiple Choice

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

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Definitions:

Letterhead

A letterhead is the heading at the top of a sheet of letter paper, typically consisting of a name, an address, a logo, and sometimes a background pattern.

Organization

Refers to a structured group of individuals working together to achieve one or more shared goals or objectives.

Individual

This term often refers to a single person or entity distinct from a group or collective.

Inside Address

The recipient's address printed on a business letter or document, typically located below the sender's address or within a letterhead.