Arbitrage
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
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
