The elimination of riskless profit opportunities in the futures market is referred to as ________.

Question

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The elimination of riskless profit opportunities in the futures market is referred to as arbitrage. This involves taking advantage of price discrepancies between different markets to make a profit without any risk. Speculation, on the other hand, involves taking on risk in the hope of making a profit, while hedging involves reducing risk by taking a position opposite to an existing position in the market. Open interest refers to the total number of outstanding futures contracts.

The Elimination of Riskless Profit Opportunities in the Futures Market