You Are Given the Choice Between Four Investments and Their

question 49

Multiple Choice

You are given the choice between four investments and their respective rates of return; A yielding 16%, B yielding 6%, C yielding 13%, and D yielding 18%. Investments A and D are from different sectors, and different market weightings. Investments B and C are from the same sector and their market weightings are similar in size. How would you realize an arbitrage opportunity?

• A) sell A and buy D
• B) sell B and buy C
• C) buy B and sell A
• D) sell C and buy D

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