Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called ?
Correct answer: C. arbitrage
- A. differential actions
- B. cash transaction
- C. arbitrage
- D. forward transactions
Explanation
Arbitrage is the simultaneous or near-simultaneous exploitation of price or yield differences for a riskless profit after transaction costs. It differs from ordinary trading, which generally involves market risk.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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