Arbitrage Occurs When

question 307

Multiple Choice

Arbitrage occurs when

• A) bond and stock rates of return equalize.
• B) investors try to profit from selling a lower rate of return asset to buy one that is nearly identical but with a higher rate of return.
• C) rates of return across all stocks equalize.
• D) investors move from lower to higher rate of return assets, regardless of the comparability of the assets.

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