________ occurs when market participants observe returns on a security that are larger than what is justified by the characteris

Question

vladimir1956 [14]

3 years ago

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________ occurs when market participants observe returns on a security that are larger than what is justified by the characteris

tics of that security and take action to quickly eliminate the unexploited profit opportunity. Market intercession Mediation Arbitrage Asset capitalization

Social Studies

1 answer:

Readme [11.4K] · Answer 1 · 2022-04-05T20:48:12+03:00

Answer:

<em>Arbitrage </em>

Explanation:

Arbitrage is <em>buying and selling an asset concurrently to benefit from a market imbalance.</em>

It is a transaction that gains on various markets or in various forms by leveraging the price differences of identical or similar financial products.

Because of market distortions, arbitration exists and therefore would not happen if all markets were completely effective.