Arbitrage?

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Arbitrage?

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Expert answered|myralein|Points 181|

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Asked 2/11/2010 4:52:52 AM

Updated 9/21/2014 2:10:25 PM

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Edited by sujaysen [9/21/2014 2:06:46 PM], Edited by sujaysen [9/21/2014 2:10:25 PM]

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alfred123

In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices.

Added 9/21/2014 6:19:17 AM

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Confirmed by sujaysen [9/21/2014 2:06:55 PM]

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debnjerry

What Does Arbitrage Mean?
The simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time.

Added 2/11/2010 6:19:45 AM

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