All of the Following Are Necessary for Arbitrage to Take

question 11

Multiple Choice

All of the following are necessary for arbitrage to take place EXCEPT

• A) no transactions costs.
• B) no sales or transfer taxes.
• C) the means to execute trades quickly.
• D) a willingness to undertake a substantial net investment.
• E) different prices in different locations.

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Definitions:

Gain On Sale

The profit realized from the sale of an asset, when the selling price exceeds its original purchase price.

Paid-In Capital

Paid-In Capital is the amount of money that shareholders have invested in a company through the purchase of stock, exclusive of earnings retained in the business.

Par Value

The nominal or face value of a bond, share of stock, or other securities, as stated by the issuing company.

Paid-In Capital

The total amount of money shareholders have invested in a company through the purchase of stock, excluding the par value of any preferred or common stock.