Alibaba recently did a Global Depository Share (GDR) IPO in the Hong Kong market. · The Hong Kong shares closed at HKD 198.40. · The shares trade in the US market at USD 200. ·

Alibaba recently did a Global Depository Share (GDR) IPO in the Hong Kong market. · The Hong Kong shares closed at HKD 198.40. · The shares trade in the US market at USD 200. · The H

Alibaba recently did a Global Depository Share (GDR) IPO in the Hong Kong market.

·      The Hong Kong shares closed at HKD 198.40.

·      The shares trade in the US market at USD 200.

·      The Hong Kong Dollar trades at 7.83 HKD/USD.

1) With that information, calculate how many Alibaba HK Global Depository Shares are required to purchase one Alibaba American Depository Share (Hint: don’t give me a fractional number of shares)

2)   Is there an arbitrage opportunity (long/short one vs. the other ?  If so, how can I do it?