Given the Following Data,a Suitable Arbitrage Opportunity for an Investor

question 11

Multiple Choice

Given the following data,a suitable arbitrage opportunity for an investor with a 2% share in Company L would be to:

• A)sell 1% shares in L,borrow on personal account and invest in shares of L.
• B)borrow on personal account and buy more shares in L.
• C)sell shares in L and buy 2% shares in U.
• D)sell shares in L and buy 1% shares in U.

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Definitions:

Present Intent

A legal term referring to an individual's current intention to perform an act or designate a legal status, crucial for the validity of certain legal documents and transactions.

Definiteness

A characteristic of a contract that requires its terms to be clear enough for the parties involved to understand their obligations and rights.

Reasonable Time

An amount of time that is fair and appropriate under the circumstances to perform a legal duty or obligation.

Promissory Estoppel

A legal principle that prevents a promisor from going back on a promise when the promisee reasonably relies on that promise to their detriment.