Derivatives Q48

48Which of the following most likely represents an arbitrage opportunity?

A
A risk free rate is earned by the combination of the underlying asset and a derivative.
B
Sale of the shares of a takeover target and purchase of shares of the potential acquirer.
C
Two identical assets or derivatives are sold for different prices in different markets.

Option : C
Explanation : Arbitrage opportunities exist when the same asset or two equivalent assets, producing the same result, sell for different prices. A and B are incorrect because they do not define arbitrage opportunities.

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