"Buy Low and Sell High Is Advice Given to People

question 33

Essay

"Buy low and sell high is advice given to people who want to make a profit by buying and selling shares of stock.Arbitrage is defined as buying a product in one market at a low price and reselling it in another market at a high price.Therefore, when stock brokers buy and sell stocks to earn a profit they are engaging in arbitrage." Evaluate this statement; state whether it is true or false and explain your answer.

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Definitions:

Respondent Behavior

behavior that occurs as a direct response to a specific stimulus, often without conscious decision, in classical conditioning.

Superstitious Behavior

Actions based on irrational beliefs that certain actions or events can influence outcomes in a way not justified by reason or science.

Functional Relationships

Relationships based on practical or beneficial interactions between entities, often analyzed in psychology and sociology for understanding dynamics.

Token Economy

A behavior modification system that uses tokens as a form of reinforcement for desired behaviors, which can be exchanged for rewards.