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    Question

    ___________ is the simultaneous purchase and sale of two

    identical commodities or instruments. This simultaneous sale and purchase is done in order to take advantage of the price variations in two different markets.
    A Cap Correct Answer Incorrect Answer
    B Hedge Correct Answer Incorrect Answer
    C Arbitrage Correct Answer Incorrect Answer
    D Term Insurance Correct Answer Incorrect Answer

    Solution

    Arbitrage is the simultaneous purchase and sale of two identical commodities or instruments in different markets to take advantage of price variations and profit from the price discrepancies. By exploiting these differences in prices, arbitrageurs aim to make risk-free profits.

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