Which of the Following Statements Regarding Arbitrage Is Not Correct

question 54

Multiple Choice

Which of the following statements regarding arbitrage is not correct?

• A) Any situation in which it is possible to make a profit without taking any risk is known as an arbitrage opportunity.
• B) Any situation in which it is possible to make a profit without making any investment is known as an arbitrage opportunity.
• C) We call a competitive market in which there are no arbitrage opportunities an arbitrage market.
• D) The practice of buying and selling equivalent goods in different markets to take advantage of a price difference is known as arbitrage.

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Definitions:

Factor Analysis

An analytical method in statistics for detecting the basic components or factors explaining the correlation structure in a group of observed variables.

Sensation Seeking

A personality trait defined by the search for experiences and feelings that are varied, novel, complex, and intense, and by the readiness to take physical, social, legal, and financial risks for the sake of such experiences.

Zuckerman

Refers to Marvin Zuckerman, a psychologist known for his research on sensation seeking, a personality trait characterized by the search for experiences and feelings that are varied, novel, complex, and intense.

Self-Efficacy

A person's belief in their ability to succeed in specific situations or accomplish a task, central to Bandura's theory of social learning.