It Is the Nature of Arbitrage to Even Out Excessive

question 73

True/False

It is the nature of arbitrage to even out excessive fluctuation by destroying its own profitability.

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Definitions:

Expected Profit

The anticipated financial return from an investment or business activity, considering potential risks and earnings.

Optimal Quantity

The most favorable amount of goods or services, determined through analysis, to meet specific objectives like minimizing costs or maximizing profit.

Surplus Inventory

Inventory exceeding the current demand, leading to excess stock that may require special handling or discounting.

Salvaged

Items or materials recovered for use or sale after being damaged, rejected, or abandoned.