The idea that rational, well-capitalized investors are not always able to immediately correct a market mispricing is referred to as:

Question

Quizplus · Accepted Answer

The correct term for this phenomenon is a limit to arbitrage. This means that while there may be a mispricing in a market, factors such as transaction costs, regulations, and temporary market disruptions can prevent rational investors from quickly correcting it. This can create opportunities for profit for investors who are able to identify and overcome these limitations to arbitrage.

The Idea That Rational, Well-Capitalized Investors Are Not Always Able