Arbitrage occurs when a person exploits the market from the difference that happens when an asset is purchased in one market and sold in a different market. The markets are usually different from where the asset is purchased then the markets where the asset is sold. The inefficiency of markets gives way to arbitrage.
A person buys stock from Market ABC at the price of $50 and sells it to market XYZ for the price of $51, where he earned $1 profit in the result difference of the markets from where the stock was bought and sold.
Economist Richard Thaler of the University of Chicago notes that most economists
Prices for many goods are higher in the city of Shenzhen on
Suspicions about arbitrage have a long history. For example, Valerian
Define the terms covered interest arbitrage and uncovered interest arbitrage. What
Assume that the following market model adequately describes the return generating behavior
You happen to be checking the newspaper and notice an arbitrage opportunity
Find the arbitrage opportunity (opportunities?). Assume for simplicity that coupons
Doug Bernard specializes in cross-rate arbitrage. He notices the
James Clark is a currency trader with Wachovia. He notices the
Assume that the returns on individual securities are generated by the following
