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    Question

    ┬а Which of the following best describes financial

    arbitrage?
    A Referring to a third party for selling an unsettled dispute Correct Answer Incorrect Answer
    B Difference between the spot rate and forward rate Correct Answer Incorrect Answer
    C Making profit due to disparities in the price in different Markets Correct Answer Incorrect Answer
    D Quoting a rate for both buying and selling a security Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Arbitrage is┬а the simultaneous purchase and sale of the same asset in different markets in ┬аorder to profit from tiny differences in the asset's listed price. It exploits short-lived variations in the price of identical or similar financial instruments in different markets or in different forms.

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