The Exploitation of Security Mispricing in Such a Way That

question 55

Multiple Choice

The exploitation of security mispricing in such a way that risk-free economic profits may be earned is called

• A) arbitrage.
• B) capital-asset pricing.
• C) factoring.
• D) fundamental analysis.
• E) None of the options are correct.

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Definitions:

Inventory Period

The average time an item remains in inventory before being sold, indicating the efficiency of inventory management.

Accounts Payable Period

The average amount of time it takes for a business to pay its invoices from suppliers and creditors.

Accounts Receivable Period

The standard length of time required for an enterprise to collect receivables from clients for credit sales of goods or services.

Operating Cycle

The duration it takes for a company to purchase inventory, sell products, and receive cash from sales, indicating the company's efficiency in managing its core operations.