An Arbitrage Is a Strategy Where

question 6

Multiple Choice

An arbitrage is a strategy where

• A)You buy one asset and sell another with a view to make a profit if the one you bought appreciates and the one you sold depreciates.
• B)You construct a series of trades that lead to non-negative cash flows at all points in time and at least one positive cash flow.
• C)You buy and asset with a view of selling it at a higher price.
• D)You buy an overpriced asset and sell an underpriced one.

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