An American Depository Receipt (ADR)is a Security Issued by a U.S.bank

question 16

Multiple Choice

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 Seimens AG trading on the Frankfurt Stock Exchange in Germany.If Seimens 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/€