The Exploitation of Security Mispricing in Such a Way That

question 20

Multiple Choice

The exploitation of security mispricing in such a way that risk-free economic profits may be earned is called ___________.

• A)arbitrage
• B)capital asset pricing
• C)factoring
• D)fundamental analysis
• E)none of the above

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Definitions:

Probability Of Success

The likelihood of achieving a desired outcome or result in an experiment or project.

Random Variable

A variable whose outcomes are determined by chance, used in probability theory and statistics.

Independent

Not influenced or controlled by others; in statistics, two variables are independent if the occurrence of one does not affect the probability of occurrence of the other.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, used as an indicator of uncertainty or volatility.