A trading opportunity that offers a riskless profit is called a(n) _______________.

A) Put option.
B) Call option.
C) Market equilibrium.
D) Arbitrage.
E) Cross-hedge.

Question

A trading opportunity that offers a riskless profit is called a(n)  _______________.A)  Put option.B)  Call option.C)  Market equilibrium.D)  Arbitrage.E)  Cross-hedge.

Arpit Malviya · Accepted Answer

Final Answer : D, Explanation :  Arbitrage refers to the practice of taking advantage of a price difference between two or more markets, striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. This is considered a riskless profit when done correctly, as it exploits the price differences without market risk.

A trading opportunity that offers a riskless profit is called a(n) _______________.

A) Put option.
B) Call option.
C) Market equilibrium.
D) Arbitrage.
E) Cross-hedge.

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Learning Objectives

Learning Objectives

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