An Arbitrage Opportunity Exists If an Investor Can Construct a __________

question 43

Multiple Choice

An arbitrage opportunity exists if an investor can construct a __________ investment portfolio that will yield a sure profit.

• A)positive
• B)negative
• C)zero
• D)all of the above
• E)none of the above

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Definitions:

Parameter

A numerical characteristic that describes and summarizes an aspect of a population in statistics.

Unbiased Estimator

A statistical estimator whose expected value is equal to the parameter being estimated, indicating accuracy across samples.

Expected Value

The long-run average value of repetitions of the same experiment or random process, calculated as the sum of all possible values weighted by their probabilities of occurrence.

Parameter

A numerical characteristic or feature of a population that is estimated using sample data.