Each Nokia ADR on the New York Stock Exchange is equivalent to I share of Nokia...
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Each Nokia ADR on the New York Stock Exchange is equivalent to I share of Nokia Corp. on the NASDAQ Helsinki Stock Exchange. The exchange rate for the Euro (which is the currency used for Finland) is $1.102731/E. The current price of Nokia Corp. in Finland is €3.45. Calculate the expected price of the Nokia ADR. a. b. The Nokia ADR is currently trading at $3.87. Based on this, and ignoring transaction costs, briefly explain what should happened to: i. Demand for Nokia stock ii. Supply of Nokia stock iii. Demand for Nokia ADRS iv. Supply of Nokia ADRS [Extra credit, 2 points] Assuming only the Nokia stock price adjusts, calculate the Nokia stock price that would result in equilibrium between Nokia stock and Nokia ADRS. Each Nokia ADR on the New York Stock Exchange is equivalent to I share of Nokia Corp. on the NASDAQ Helsinki Stock Exchange. The exchange rate for the Euro (which is the currency used for Finland) is $1.102731/E. The current price of Nokia Corp. in Finland is €3.45. Calculate the expected price of the Nokia ADR. a. b. The Nokia ADR is currently trading at $3.87. Based on this, and ignoring transaction costs, briefly explain what should happened to: i. Demand for Nokia stock ii. Supply of Nokia stock iii. Demand for Nokia ADRS iv. Supply of Nokia ADRS [Extra credit, 2 points] Assuming only the Nokia stock price adjusts, calculate the Nokia stock price that would result in equilibrium between Nokia stock and Nokia ADRS.
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