The exploitation of security mispricing in such a way that risk-free economic profits may be earned is called ___________.
A) arbitrage
B) capital asset pricing
C) factoring
D) fundamental analysis
E) none of these

Question

Quizplus · Accepted Answer

The definition described in the question matches with the concept of arbitrage. It involves buying and selling of assets simultaneously in different markets to take advantage of the price difference and earn risk-free profits.

The Exploitation of Security Mispricing in Such a Way That