____________ are good examples of the limits to arbitrage because they show that the law of one price is violated.I) Siamese twin companiesII) Unit trustsIII) Closed-end fundsIV) Open-end fundsV) Equity carve-outs
A) I and II
B) I, II, and III
C) I, III, and V
D) IV and V
E) V

Question

Quizplus · Accepted Answer

Siamese twin companies, closed-end funds, and equity carve-outs are examples where the law of one price is often violated, demonstrating limits to arbitrage. Siamese twin companies share assets but may have differing stock prices. Closed-end funds can trade at prices different from their net asset value. Equity carve-outs can lead to pricing inefficiencies between parent and subsidiary.

____________ Are Good Examples of the Limits to Arbitrage Because