Which of the following statements regarding arbitrage is the most correct?
A)Any situation in which it is possible to make a profit while taking on risk is known as an arbitrage opportunity.
B)Any situation in which it is possible to make a profit by making an investment is known as an arbitrage opportunity.
C)We call a competitive market in which there are no arbitrage opportunities an arbitrage market.
D)The practice of buying and selling equivalent goods in different markets to take advantage of a price difference is known as arbitrage.

Question

Quizplus · Accepted Answer

Arbitrage refers to the practice of buying and selling equivalent goods in different markets to take advantage of a price difference. Options A and B are too broad and don't specifically relate to the concept of arbitrage. Option C is incorrect because an arbitrage market refers to a market in which there are no arbitrage opportunities, not the other way around.

Which of the Following Statements Regarding Arbitrage Is the Most