Which of the following statements regarding arbitrage is not 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.

Question

Quizplus · Accepted Answer

Arbitrage opportunities refer to the chance to make a profit without risk or investment by exploiting price differences across markets. A market with no arbitrage opportunities is typically called an efficient market, not an arbitrage market. The term "arbitrage market" is not commonly used to describe such a scenario.

Which of the Following Statements Regarding Arbitrage Is Not Correct