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Fiat ADRs and underlying shares trading based question

If Fiat ADRs were trading at $35 while the underlying shares were trading in Milan at EUR31.90, what could you do to make a trading profit? Employ the information in problem 1, above, to help you and suppose that transaction costs are negligible.
The no-arbitrage ADR U.S. dollar price is $33.07. If Fiat ADRs were trading at $35, a wise investor would sell short the relatively overvalued ADRs and employ the proceeds to purchase the relatively undervalued Fiat shares on the Milan exchange. The profit would be $35 - $33.07 = $1.93 per ADR.

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