An arbitrageur is someone who:
A)Always takes the long position in a futures contract.
B)Always takes the short position in a futures contract.
C)Seeks the high returns that come from the high risk inherent in futures markets.
D)Simultaneously buy and sell financial instruments to benefit from temporary price differences.

Question

Quizplus · Accepted Answer

An arbitrageur is someone who exploits temporary mispricing in financial instruments by simultaneously buying and selling the same asset to benefit from price differences. This is done to make a risk-free profit. Therefore, option D is the correct answer. Options A, B, and C are incorrect as they do not accurately define the actions of an arbitrageur.

An Arbitrageur Is Someone Who