You See on Craigslist That a Used XBOX 360 Sells

question 43

Multiple Choice

You see on Craigslist that a used XBOX 360 sells for $100 and a new XBOX 360 sells for $300. Is this an arbitrage opportunity?

• A) No, because the market fora used XBOX 360 is not the same as the market for a new XBOX 360.
• B) No, because the market for a used XBOX 360 is a competitive market.
• C) Yes, because the market for a used XBOX 360 is a competitive market.
• D) Yes, because the market for a used XBOX 360 is not the same as the market for a new XBOX 360.

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Definitions:

Stock Options

These are contracts that give the holder the right to buy or sell shares of a stock at a predetermined price within a specific time period.

Option Holders

Individuals or entities that possess the rights to execute the purchase or sale of a specific asset at a specified price before the option expires.

Stock Ownership Plans

Employee benefit plans that provide workers with an ownership interest in the company through stock ownership, often aimed at improving employee motivation and loyalty.

Human Resource Management

The strategic approach to the effective management of people in a company or organization to help their business gain a competitive advantage, including hiring, training, and employee benefit design.