Question

Arbitrage causes an equalization of the _________ when assets are identical or nearly identical

Answer 1

Arbitrage causes an equalization of the rate of return of assets when assets are identical or nearly identical.

We can define arbitrage as it is the activity that generates dependable profits by means of selling one asset and buying the same or nearly same asset to advantage from temporary differences in fees or costs of return; the exercise that equalizes expenses or returns on comparable financial gadgets and hence removes further opportunities for without any risk economic advantage.