Suppose that the ETF is trading for $362.36;you should:
A)sell the EFT and buy 2 shares of IBM,3 shares of MRK,and 3 shares of C.
B)sell the EFT and buy 3 shares of IBM,2 shares of MRK,and 3 shares of C.
C)buy the EFT and sell 2 shares of IBM,3 shares of MRK,and 3 shares of C.
D)do nothing,no arbitrage opportunity exists.

Question

Quizplus · Accepted Answer

D)Value of ETF = 2 × 121.57 + 3 × 36.59 + 3 × 3.15 = $362.36,so no arbitrage opportunity exists

Suppose That the ETF Is Trading for $362