If everybody has the same information, then a well-functioning market for assets would, in equilibrium, leave no opportunities for arbitrage.

Question

Quizplus · Accepted Answer

In a well-functioning market where everyone has the same information, all assets would be priced efficiently and there would be no price discrepancies to take advantage of through arbitrage. Therefore, there would be no opportunities for arbitrage in equilibrium.

If Everybody Has the Same Information, Then a Well-Functioning Market