How Does Arbitrage Help the Law of One Price

question 111

Essay

How does arbitrage help the Law of One Price?

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Definitions:

Linguistic Competence

Linguistic competence is the ability of an individual to understand and use the rules of a language, including its grammar, vocabulary, and pronunciation.

Linguistic Performance

The behavior or responses actually produced by a cognitive processor engaged in a particular cognitive activity involving language. Contrast with linguistic competence.

Linguistic Relativity

The hypothesis that the structure of a language affects its speakers' world view or cognition, and thus people's perceptions are relative to their spoken language.

Bilinguals

Individuals who have the ability to communicate fluently in two distinct languages.