Arbitrage means taking advantage of temporary differences in market prices to make a profit. Assume two real estate companies, A

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3 years ago

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Arbitrage means taking advantage of temporary differences in market prices to make a profit. Assume two real estate companies, A

and B, both operate in New York area and focus on office properties. You have determined that Company A's shares have an intrinsic value of $20 per share but are trading at $22 per share, while Company B's shares are worth $25 per share but are trading at $22 per share. What would a rational investor (or an arbitrageur) do to take advantage of this price difference (no short-selling constraint and transaction fee)

Business

1 answer:

Nadusha1986 [10] · Answer 1 · 2022-05-13T21:26:10+03:00

Nadusha1986 [10]3 years ago

7 0

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