Question

Arbitrage proofs in futures market pricing relationships:_____.a. incorporate transactions costs. b. rely on the CAPM. c. demonstrate how investors can exploit misalignments.d. all of the options are correct. e. none of the options are correct.

Answer 1

Answer:

Option C: Demonstrate how investors can exploit misalignments.

Explanation:

Arbitrage is illegal in some countries. It is simply a means used by investors to purchase or sale an asset so as to make profit from a difference in the asset's price that is usually between markets.

Price is the amount of money charged for a product or service as itis used to determine a firm's market share and profitability and its produces revenue. Market pricing helps Finding combination of margin and market share to maximize long-term profitability.