The buying and selling activities that tend to equalize the rates of return on identical or nearly identical assets is called:

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Arbitrage refers to the process of buying and selling assets to take advantage of price differences in different markets or at different times. The ultimate goal of arbitrage is to generate a profit without incurring any risk. In the context of financial markets, arbitrage is a key mechanism that ensures that the prices of identical or very similar assets remain equalized or close to each other, as any temporary price differences are quickly eliminated by arbitrageurs who buy low and sell high, driving the prices back to equilibrium. Beta and risk are not directly related to the equalization of rates of return, while diversification can help reduce risk but does not necessarily affect the alignment of returns on similar assets.

The Buying and Selling Activities That Tend to Equalize the Rates