Arbitrage Is

question 2

Multiple Choice

Arbitrage is:

• A) a zero initial wealth trading strategy that has a likelihood of making profits without risk of a loss
• B) a way of resolving disputes
• C) a risky way of making money for arbitrators
• D) a zero-investment trading strategy in which the likelihood of portfolio gain overwhelms the likelihood of loss
• E) None of these answers are correct.

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Definitions:

Profits And Losses Ratio

A financial metric that compares the profits and losses of a business, showing the relationship between net profits and net losses over a specific period.

Withdrawal

The action of taking money out of an account, or the removal of assets from a business by the owner for personal use.

Equity Interest

Ownership interest in a company, represented by the equity or shares held by investors.

Mutual Agreement

A consensus reached by two or more parties where the terms of an engagement or deal are accepted by all involved.