Arbitrage

From CNM Wiki
Jump to: navigation, search

Arbitrage is the simultaneous buying and selling of the same commodity or security in two different markets at different prices, thus yielding a risk-free return.


Definitions

According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),

Arbitrage. The simultaneous buying and selling of the same commodity or security in two different markets at different prices, thus yielding a risk-free return.

According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),

Arbitrage. The simultaneous buying and selling of the same commodity or security in two different markets at different prices and pocketing a risk-free return.

According to Macroeconomics by Mankiw (7th edition),

Arbitrage. The act of buying an item in one market and selling it at a higher price in another market in order to profit from the price differential in the two markets.

Related concepts

Related lectures