Which of the Following Statements Regarding Arbitrage Is the Most

question 79

Multiple Choice

Which of the following statements regarding arbitrage is the most 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:

Authority

The power or right to give orders, make decisions, and enforce obedience, seen in contexts ranging from legal to organizational structures.

Deceased Principals

Deceased principals involve situations in agency relationships where the principal has passed away, affecting the continuation or validity of agreements made with agents.

Agency

A relationship where one party, the agent, is authorized to act on behalf of another, the principal, in dealings with third parties.

Necessity

The condition or situation of being required or indispensable, often invoked in legal contexts where actions are taken out of an unavoidable need.