Question
Alibaba recently did a Global Depository Share (GDR) IPO in the Hong Kong market. The Hong Kong shares closed at HKD 198.40. The shares trade
Alibaba recently did a Global Depository Share (GDR) IPO in the Hong Kong market.
The Hong Kong shares closed at HKD 198.40.
The shares trade in the US market at USD 200.
The Hong Kong Dollar trades at 7.83 HKD/USD.
1) Given this information, calculatehow many Alibaba HK Global Depository Shares are required to purchase one Alibaba American Depository Share
2) Is there anarbitrage opportunity(long/short one vs. the other ?If so, how can I do it?
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Cases in Financial Reporting
Authors: Michael J. Sandretto
1st edition
538476796, 978-0538476799
