Arbitrage Is the Process by Which Investors Simultaneously Sell

question 173

Multiple Choice

Arbitrage is the process by which investors simultaneously sell

• A) assets with higher rates of return and buy otherwise identical assets with lower rates of return.
• B) assets with lower rates of return and buy otherwise identical assets with higher rates of return.
• C) riskier assets and buy less risky assets.
• D) less risky assets and buy riskier assets.

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Definitions:

Heating Oil

A low viscosity, liquid petroleum product used as a fuel oil for furnaces or boilers in buildings for heating purposes.

Supply for Heating Oil

The total availability of heating oil in the market, influenced by production levels, reserves, and importation.

Inferior Goods

Inferior goods are products whose demand decreases as consumer income rises, opposite to normal goods.

Demand

The amount of a product or service that buyers are prepared and capable of buying at different price levels over a specific time frame.