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In the London market, Rolls Royce stock closed at .875 pounds per share. On the same day, pound sterling to the USD spot exchange rate
In the London market, Rolls Royce stock closed at .875 pounds per share. On the same day, pound sterling to the USD spot exchange rate was .6366 pounds/$. Rolls Royce trades as an ADR in the OTC market in the US. 5 underlying Rolls Royce shares are packaged into one ADR. If the Rolls Royce ADRs were trading at $5.75 when the underlying shares were trading in London at .875 pounds, ignoring transaction costs, the arbitrage trading profit would be...pls show work.
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