Arbitrage is:
A) capital controls.
B) interest rate management by the central bank.
C) exploiting profit opportunities in the market resulting from price differences.
D) investing in junk bonds or businesses that are not ethical.

Question

Quizplus · Accepted Answer

Arbitrage refers to the practice of taking advantage of price differences for the same asset or security in different markets or exchanges. Traders who engage in arbitrage aim to buy low in one market and sell high in another, effectively making a profit from the differences in price. This practice helps to eliminate market inefficiencies and ensures that prices are more closely aligned across different markets.

Arbitrage Is