SHELL

SHELL

SHELL

Introduction

Shell common stocks are securities with linked cash flow, so that the ratio of their stock prices should be fixed. In fact, the ratio is highly variable, moving with the markets where the securities are intensively traded. Shell trades more actively in the Netherlands and U.S. markets, whereas Shell trades more actively in the United States. The result is that the Shell relative price moves positively with the Netherlands and U.S. markets and negatively with the U.K. market. The ability to arbitrage these disparities and their causes are major case focal points.

Discussion

To demonstrate how valuation is affected by the ...