Arbitrage trading strategy implies that:

Related MCQs

• Which of the statements is/are false regarding Arbitrage Pricing Theory (APT)? I. APT assumes that return on any asset can be expressed as a linear function of a set of market factors or indexes. II. The arbitrage price line indicates relation between unsystematic risk and the expected return of an asset. III. While deriving the APT model, APT assumes that the error term can be reduced to zero through appropriate diversification.
• If you believe in the _______ form of the EMH, you believe that stock prices only reflect all information that can be derived by examining market trading data such as the history of past stock prices, trading volume or short interest.
• Which of the following statements about arbitrage is correct?
• Consider these two investment strategies: Strategy ___ is the dominant strategy because __________.
• Program trading decreases market efficiency by exaggerating price discrepancies between the cash and futures markets
• An order to buy or sell at the most advantageous price obtainable after the order is represented in the trading crowd.
• __________ would mean that no investor would be able to outperform the market with trading strategies based on publicly available information.
• Which are the popular types of orders placed through an online trading account?
• A purely passive strategy is defined as
• A hybrid strategy is one where the investor