Question
Use the information for the question(s) below. An exchange-traded fund (ETF) is a security that represents a portfolio of individual stocks. Consider an ETF for
Use the information for the question(s) below.
An exchange-traded fund (ETF) is a security that represents a portfolio of individual stocks. Consider an ETF for which each share represents a portfolio ofthree shares of International Business Machines (IBM), five shares of Apple (AAPL), and eight shares of Tesla (TSLA).
Suppose the current market price of each individual stock is shown below:
| Stock | Current Price |
| IBM | $145.60 |
| Apple | $180.00 |
| Tesla | $267.50 |
- What is the price per share of the ETF in a normal market?
- Assume that the ETF is trading for $3,700.00. What (if any) arbitrage opportunity exists? What (if any) trades would you make?
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The Routledge International Handbook Of Financialization
Authors: Philip Mader, Daniel Mertens, Natascha Van Der Zwan
1st Edition
1138308218, 978-1138308213
