Mention the conditions to be fulfilled for arbitrage.
CS Professional · Capital Commodity and Money Market · PYQS · June 2016
Mention the conditions to be fulfilled for arbitrage.
Answer & Explanation:
Arbitrage is possible when one of the three conditions is met: The same asset must trade at the different prices on all markets. Two assets with identical cash flows must trade at different prices. An asset with a known price in the future, must trade today at a different price than its future price discounted at the risk-free interest rate.
Topics: Financial Markets
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