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Suppose that a French firm would like to have its stock available through an American Depository Receipt (ADR). If the firms stock is currently selling
Suppose that a French firm would like to have its stock available through an American Depository Receipt (ADR). If the firms stock is currently selling for 75 and that the exchange rate between the and the $ is 1.0=$1.0592. What price should we expect for the ADR in US dollars? Suppose that over the next year the dollar reaches parity with the Euro, i.e., $1.00=1.00 and that the price of the French firms stock rises to 100. What would expect the price of the ADR to be
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