What Terms Refers to the Process of Taking Advantage of Different

question 37

Multiple Choice

What terms refers to the process of taking advantage of different prices for a good in different markets?

• A) arbitrage
• B) currency exchange
• C) capitalism
• D) the law of one price

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Definitions:

DAX-30 Index Futures

Financial contracts to buy or sell the DAX 30 index at a future date, used for hedging or speculating on the German stock market.

Spot Index

A real-time index that reflects the current prices of the securities included in the index.

Arbitrage Profit

The gain obtained from the simultaneous purchase and sale of the same or equivalent assets or commodities in different markets or in derivative forms.

Selling Short

The investment strategy of selling securities one does not currently own, with the expectation of buying them back later at a lower price.