Which of the Following Statements Is True

question 26

Multiple Choice

Which of the following statements is true?

• A)Pure arbitrage involves buying blocks of securities in anticipation of some information release.
• B)Risk arbitrage involves buying an asset in one market at one price and selling it immediately in another market at a higher price.
• C)Risk arbitrage involves buying blocks of securities in anticipation of some information release, pure arbitrage involves buying an asset in one market at one price and selling it immediately in another market at a higher price and program trading is associated with seeking a risk arbitrage between a cash market price and the futures market price of that instrument.
• D)None of the listed options are correct.

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Definitions:

Differential Item Functioning

A phenomenon where different groups of test-takers respond differently to a particular test item, not due to differences in the trait being measured but due to some other characteristic.

Construct

An abstraction that cannot be seen directly but is valued because it helps organize the myriad of potential observations in the real world.

Content Bias

A condition which occurs when testing materials are more familiar to one group than another.

Epistemology

The branch of philosophy concerned with the theory of knowledge, its nature, sources, and limitations.