The process of buying an underpriced security and selling an equivalent overpriced security until the prices converge is known as arbitrage. This statement is true.
<h3>What Is Arbitrage?</h3>
The arbitrage approach, used in foreign exchange trading, allows investors to lock in profits by simultaneously buying and selling the same security, good, or currency on two different marketplaces. By using this strategy, traders can profit from the disparities in pricing for the same asset across the two different regions that are represented on each side of the trade.
Arbitrage is the practice of purchasing an underpriced security and selling an equivalently-priced asset until the prices converge. Trading on illegal insider knowledge may result in abnormal profits even if the efficient market theory is accurate in a semi-strong sense.
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Answer: Option A
Explanation: In simple words, substitution effect refers to the economic phenomenon which states that when price of one good rises the demand for the alternative of that particular good also rises. For example - coke and pepsi.
On the other hand, income effect states that when the price of a commodity rises, a number of consumers might find it hard to purchase due to the price exceeding their income power which further results in lower demand.
Hence from the above we can conclude that the correct option is A.
Answer: The answer is $1,092,865.5426
To the nearest whole dollar, we have:
$1,092,866
Explanation: from the question above, we will be calculating the present value of a cashflow of $93,000 over a period of 20 years, at a rate of 5.76%.
We will be performing a discounting operation.
Refer to the attached files below to see the calculations and how we arrived at the answer above.
Answer:
Glocalisation
Explanation:
Thirst, a beverage manufacturer is involved in glocalisation by marketing its products using the same strategy globally. However, the ethnicity contained in their ads and the music used in jingles change according to the place. This is to say that they make use of ads which is particular to a specific location taking their culture and language into consideration.
The term "glocalization" was coined by sociologist Roland Robertson in the Harvard Business Review, in 1980.
Glocalization is a combination of the words "globalization" and "localization".
Glocalization is used to describe the ability of a product or service that is developed and distributed worldwide to adjust and accommodate the consumer in a local market.
Consumers in the local market have different taste and preference. Glocalisation is the ability of a product sold globally to fit into the local market at different places. It is an expensive process but firms usually make more benefits from practicing glocalisation.
Answer:
the internal rate of return is 6%
Explanation:
The computation of the internal rate of return is shown below;
Given that
Years Cash flows
0 -$20,790
1 $6,000
2 $6,000
3 $6,000
4 $6,000
Now apply the following formula i.e..
= IRR()
After applying the above formula, the internal rate of return is 6%
