The term "arbitrage" refers to
A) buying low and selling high.
B) short selling high and buying low.
C) earning risk-free economic profits.
D) negotiating for favorable brokerage fees.
E) hedging your portfolio through the use of options.

Question

Quizplus · Accepted Answer

Arbitrage involves taking advantage of price differences in different markets or forms to make a risk-free profit. It does not inherently involve negotiation for fees, specific investment strategies like buying low and selling high or short selling, nor does it specifically relate to hedging strategies.

The Term "Arbitrage" Refers to