Which of the Following Statements Is True

question 6

Multiple Choice

Which of the following statements is true?

• A)Arbitrage means the inability to make a profit without taking risk.
• B)Arbitrage means that an FI takes risks in order to make a profit.
• C)Arbitrage means that an FI does not take any risks and thus does not make a profit.
• D)Arbitrage means the ability to make a profit without taking risk.

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Definitions:

Contradictory Statements

Statements that cannot both be true at the same time and under the same conditions because they assert opposing propositions.

Conjunction

A logical operator that combines two statements or conditions, both of which must be true for the overall statement to be true.

Equivalent Statements

Statements that are logically similar in that they always have the same truth value in every possible scenario.

Conjunction

In logic, a connective that combines multiple statements or propositions to form a single proposition that is true only if all its components are true.