Exams › IBPS PO › General Awareness

When an investor takes advantage of price differences in separate markets by simultaneously buying and selling an asset, which financial strategy is being employed?

1. Speculation
2. Hedging
3. Arbitrage
4. Short Selling

Correct answer: Arbitrage

Solution

Arbitrage is the practice of buying and selling the same asset in different markets at the same time to profit from price differences. This is distinct from speculation, hedging, and short selling.

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