No Arbitrage Is Equivalent to the Idea That All Risk-Free

question 46

Multiple Choice

No arbitrage is equivalent to the idea that all risk-free investments should offer investors ________.

• A) zero return
• B) the same return
• C) positive returns
• D) negative returns

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Definitions:

Comprehensive Explanations

Detailed and thorough explanations that cover or encompass all aspects or factors of a subject or phenomenon.

Illusory Correlations

The phenomenon of perceiving a relationship between variables (typically people, events, or behaviors) even when no such relationship exists.

Complex Assumptions

Premises or beliefs that involve multiple interconnected elements, often taken for granted in reasoning or analysis.

Falsifiable

Refers to the ability of a hypothesis or theory to be disproven by experimental or observational evidence.