A Possible Limit on Arbitrage Activity That May Allow Behavioural

question 11

Multiple Choice

A possible limit on arbitrage activity that may allow behavioural biases to persist is ________.

• A)technical trends in prices
• B)momentum effects
• C)fundamental risk
• D)trend reversals

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Definitions:

Conglomerate Merger

A type of corporate action where two companies operating in entirely different industries come together to form a single larger corporation.

Vertical Mergers

Mergers between companies that operate at different levels of the supply chain, such as a manufacturer merging with a supplier or distributor.

Horizontal Mergers

A business consolidation that occurs between firms operating in the same industry, often to increase market share and reduce competition.

Antitrust Laws

Legislation enacted to prevent anti-competitive practices, promote fair competition, and protect consumers from monopolies and cartels.