In the context of any type of market what do you understand by the term Arbitrage ........

Economic Affairs Financial Markets

Download Solution PDF

In the context of any type of market, what do you understand by the term Arbitrage?

Making profit through speculative trading

Making Profit due to difference between two stock indices

The simultaneous purchase and sale of an asset in order to profit from a difference in the price in the same market

Buying securities from the primary market to sell them at higher prices in secondary market.

छोटे Courses बड़े Results

Master Financial Markets

Prepare through Micro-courses

Try Now

Explanation:

3rd option is correct.

Arbitrage is the simultaneous purchase and sale of an asset to profit from a difference in the price. It is a trade that profits by exploiting the price differences of identical or similar financial instruments on different markets or in different forms. Arbitrage exists as a result of market inefficiencies.