Question

Some companies​ cross-list their​ shares, meaning that their stock trades on more than one stock exchange. For​ example, BlackBerry​ Limited, the maker of BlackBerry mobile​ devices, trades on both the Toronto Stock Exchange and NASDAQ. If its price in Toronto is 59 Canadian dollars per share and anyone can exchange Canadian dollars for U.S. dollars at the rate of US$ 0.93 per C$ 1.00​, what must​ BBRY's price be on​ NASDAQ?

Answer 1

Answer:

US$55

Explanation:

An exchange rate is the value of the currency of one country compared to the currency of another country.

In this question, the currency of the US, US dollar, is being compared to the currency of Canada, Canadian dollar. This can be mathematically stated as follows:

USD $/C$ = 0.93/1 ............................................. (1)

Equations implies that Canadian dollars can be exchnaged for U.S. dollars at the rate of US$0.93 per C$1.00.

To calculate the BlackBerry​ Limited's price on NASDAQ, we simply multiply the its price of C$59 on the Toronto Stock Exchange by the exchange rate of 0.93/1 as follows:

BlackBerry​ Limited's price on NASDAQ = 59 × (0.93/1)

                                                                  = 59 × (0.93 ÷ 1)

                                                                  = 59 × 0.93

                                                                   = US$54.87

Therefore, BlackBerry​ Limited's share price on NASDAQ is approximately US$55.

I wish you the best.