Purchasing commodities, securities, or bills of exchange in one market and immediately selling them in another to make a profit from price differences in the two markets is called:

Question

Quizplus · Accepted Answer

This is the definition of arbitrage. Profiteering and skimming imply unethical or illegal methods of making a profit, whereas arbitrage is a legitimate strategy used in financial markets. Therefore, choices A and B are incorrect.

Purchasing Commodities, Securities, or Bills of Exchange in One Market