Is the Following an Arbitrage Opportunity? a Bond That Cost

question 3

Essay

Is the following an arbitrage opportunity? A bond that cost nothing but will payoff zero with certainty in the future.

---

Definitions:

Cross-Situational Consistency

The extent to which an individual's behavior remains consistent across different situations and contexts.

Trait Approach

A theoretical framework in personality psychology that focuses on the identification and measurement of specific, stable characteristics that differentiate individuals.

Trait Psychologists

Psychologists who study and categorize human personalities based on identifiable traits and characteristics.