Which of the following statements regarding arbitrage is the most correct? A) Any situation in which it is possible to make a profit without taking any risk is known as an arbitrage opportunity. B) Any situation in which it is possible to make a profit without making any investment is known as an arbitrage opportunity. C) We call a competitive market in which there are no arbitrage opportunities an arbitrage market. D) The practice of buying and selling equivalent goods in different markets to take advantage of a price difference is known as arbitrage.

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter7: International Arbitrage And Interest Rate Parity
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Which of the following statements regarding arbitrage is the most correct?

A) Any situation in which it is possible to make a profit without taking any risk is known as an arbitrage opportunity.

B) Any situation in which it is possible to make a profit without making any investment is known as an arbitrage opportunity.

C) We call a competitive market in which there are no arbitrage opportunities an arbitrage market.

D) The practice of buying and selling equivalent goods in different markets to take advantage of a price difference is known as arbitrage.

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