A(n) __________ opportunity is a trade where the investor has zero net investment, has no possibility of loss and the potential possibility of a gain.

Question

Quizplus · Accepted Answer

This is the definition of an arbitrage opportunity. In an arbitrage trade, the investor takes advantage of market inefficiencies to make a risk-free profit. They essentially buy and sell assets simultaneously to eliminate any possibility of loss and lock in a gain.

A(n) __________ Opportunity Is a Trade Where the Investor Has