Arbitrage occurs when investors try to profit from situations where
A) stock rates of return exceed bond rates of return.
B) bond rates of return exceed stock rates of return.
C) two identical assets have different rates of return.
D) returns on financial assets exceed returns on real assets.
Correct Answer:
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Q89: Suppose stock A sells for $30 per
Q90: Investors diversify portfolios
A) because diversified portfolios pay
Q91: Pigou buys a house for $500,000, rents
Q92: Another name for diversifiable risk is
A) systemic
Q93: The buying and selling process that leads
Q95: The process by which investors seek to
Q96: Arbitrage occurs when
A) bond and stock rates
Q97: Another name for nondiversifiable risk is
A) inflation
Q98: Suppose two corporate bonds with similar risk
Q99: Arbitrage causes an equalization of the _
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