A trading opportunity that offers a riskless profit is called a(n):

Question

Quizplus · Accepted Answer

Arbitrage refers to taking advantage of a price discrepancy in different markets to make a riskless profit. It involves buying and selling the same asset in different markets simultaneously to benefit from the difference in prices. As there is no risk involved in the trade, it is considered a riskless profit opportunity. Therefore, the correct choice is D) arbitrage. The other options, such as put and call options, market equilibrium, and cross-hedge, do not necessarily offer riskless profit opportunities.

A Trading Opportunity That Offers a Riskless Profit Is Called