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13#
发表于 2012-3-31 16:22
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Which of the following statements about arbitrage is NOT correct A)
| Arbitrage can cause markets to be less efficient. |
| B)
| No investment is required when engaging in arbitrage. |
| C)
| If an arbitrage opportunity exists, making a profit without risk is possible. |
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Arbitrage is defined as the existence of riskless profit without investment and involves selling an asset and simultaneously buying the same asset for a lower price. Since the trades cancel each other, no investment is required. Because it is done simultaneously, a profit is guaranteed, making the transaction risk free. Arbitrage actually helps make markets more efficient because price discrepancies are immediately eradicated by the actions of arbitrageurs. |
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