MCQOPTIONS
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| 1. |
Which of the following statements about arbitrage is correct? |
| A. | A risk averter will arbitrage because profits can be made with no risk and no investment. |
| B. | A risk averter will never arbitrage because of the risk involved. |
| C. | Arbitrage opportunity arises when profits can be made with low level of risk. |
| D. | Arbitrage opportunities continue to exist in equilibrium. |
| Answer» B. A risk averter will never arbitrage because of the risk involved. | |