A U.S. institutional investor with a large portfolio of U.S. and international stocks wants to add 20,000

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A U.S. institutional investor with a large portfolio of U.S. and international stocks wants to add 20,000 shares of DaimlerChrysler to its portfolio. DaiinlerChiysler trades as the same global share on several exchanges in the world. A U.S. broker quotes the NYSE price of DaimlerChrysler as $43.45-43.65, net of commissions. The institutional investor is also considering purchasing shares in Germany, where the offer price quoted for DaimleiChrysler's shares on the Frankfurt stock exchange (XETRA) is €44.9"). with a 0.10 percent commission to be paid on the transaction value. Which of the two alternatives is better for the investor? How much would be the total saving by using the better of the two alternatives? The exchange rate is €:$ 0.9705-0.9710.
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for...
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Global Investments

ISBN: 978-0321527707

6th edition

Authors: Bruno Solnik, Dennis McLeavey

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