A share of the ADR (American Depository Receipt) of a Canadian firm represents five shares of that firm's stock that is traded on the Toronto stock exchange. The share price of the firm was 80 Canadian dollars when the Toronto stock market closed. As the U.S. market opens, the Canadian dollar is worth $0.79 per Canadian dollar.

If the ADR were trading at $200 when the underlying share trading on the Toronto stock exchange at 80 Canadian dollars and the Canadian dollar is worth $0.79, what can you do to earn a trading profit, ignoring transaction costs? Short sell 5 shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto stock exchange, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase one share of ADR at the price of $200 per share in the U.S. market. The transaction would yield a profit of $116.00. Short sell 5 shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto stock exchange, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase one share of ADR at the price of $200 per share in the U.S. market. The transaction would yield a profit of $306.33. Short sell one share of ADR at the price of $200 in the U.S. market, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase five shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto Stock stock exchange. The transaction would yield a profit of $136.80. Short sell one share of ADR at the price of $200 in the U.S. market, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase five shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto Stock stock exchange. The transaction would yield a profit of $98.73. Question 12 (3.33 points) Saved If the ADR were trading at $400 when the underlying share trading on the Toronto stock exchange at 80 Canadian dollars and the Canadian dollar is worth $0.79, what can you do to earn a trading profit, ignoring transaction costs? Short sell one share of ADR at the price of $400 in the U.S. market, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase five shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto stock exchange. The transaction would yield a profit of $84.00. Short sell one share of ADR at the price of $400 in the U.S. market, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase five shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto stock exchange. The transaction would yield a profit of $298.73. Short sell one share of ADR at the price of $400 in the U.S. market, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase five shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto stock exchange. The transaction would yield a profit of $336.80. Short sell 5 shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto stock exchange, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase one share of ADR at the price of $400 per share in the U.S. market. The transaction would yield a profit of $106.33. If the ADR were trading at $200 when the underlying share trading on the Toronto stock exchange at 80 Canadian dollars and the Canadian dollar is worth $0.79, what can you do to earn a trading profit, ignoring transaction costs? Short sell 5 shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto stock exchange, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase one share of ADR at the price of $200 per share in the U.S. market. The transaction would yield a profit of $116.00. Short sell 5 shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto stock exchange, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase one share of ADR at the price of $200 per share in the U.S. market. The transaction would yield a profit of $306.33. Short sell one share of ADR at the price of $200 in the U.S. market, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase five shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto Stock stock exchange. The transaction would yield a profit of $136.80. Short sell one share of ADR at the price of $200 in the U.S. market, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase five shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto Stock stock exchange. The transaction would yield a profit of $98.73. Question 12 (3.33 points) Saved If the ADR were trading at $400 when the underlying share trading on the Toronto stock exchange at 80 Canadian dollars and the Canadian dollar is worth $0.79, what can you do to earn a trading profit, ignoring transaction costs? Short sell one share of ADR at the price of $400 in the U.S. market, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase five shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto stock exchange. The transaction would yield a profit of $84.00. Short sell one share of ADR at the price of $400 in the U.S. market, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase five shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto stock exchange. The transaction would yield a profit of $298.73. Short sell one share of ADR at the price of $400 in the U.S. market, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase five shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto stock exchange. The transaction would yield a profit of $336.80. Short sell 5 shares of the Canadian firm's stock at 80 Canadian dollars per share on the Toronto stock exchange, and convert the proceeds to Canadian dollars at the spot rate of $0.79 to purchase one share of ADR at the price of $400 per share in the U.S. market. The transaction would yield a profit of $106.33