Arbitrage is a trading strategy that involves buying and selling assets to profit from price discrepancies in different markets or forms without risk of loss. It requires no initial investment, aiming for a risk-free profit, which aligns with choice A's description.

Solved

Arbitrage Is

Question 9

Multiple Choice

Arbitrage is:

A) a zero initial wealth trading strategy that has a likelihood of making profits without risk of a loss
B) a way of resolving disputes
C) a risky way of making money for arbitrators
D) a zero-investment trading strategy in which the likelihood of portfolio gain overwhelms the likelihood of loss
E) None of these answers are correct.

Correct Answer: