Determining an ArbitrageOpportunity[WLO: 3] [CLOs: 4, 8] Go to https://www.adr.com/Investors/Markets(Links to an external site.). Look up the price of a Honda ADR. Next, look up the price of a share...

Determining an ArbitrageOpportunity[WLO: 3] [CLOs: 4, 8]

Go to
https://www.adr.com/Investors/Markets(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

• 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.