Traders employ strategies to generate revenues from positions in one or more securities including:

Question

Quizplus · Accepted Answer

Traders use various strategies to generate revenue, including speculation (taking on market risk in the hope of profit), riskless arbitrage (exploiting price differences of the same asset in different markets without risk), and risk arbitrage (profit from the successful completion of mergers, acquisitions, etc., which involves risk). Hedging is typically used to reduce risk, not to generate revenue, making options A, B, and C correct.

Traders Employ Strategies to Generate Revenues from Positions in One