One can profit from an arbitrage opportunity by
A) taking a long position in the cheaper market and a short position in the expensive market.
B) taking a short position in the cheaper market and a long position in the expensive market.
C) taking a long position in both markets.
D) taking a short position in both markets.

Question

Quizplus · Accepted Answer

Arbitrage involves buying and selling the same asset in different markets to profit from price differences. Taking a long position in the cheaper market (buying where the price is lower) and a short position in the more expensive market (selling where the price is higher) allows one to profit from the price discrepancy.

One Can Profit from an Arbitrage Opportunity by