- CFA Exams
- CFA Level I Exam
- Topic 7. Derivatives
- Learning Module 51. Arbitrage, Replication, and the Cost of Carry in Pricing Derivatives
- Subject 1. Arbitrage and Replication
CFA Practice Question
The no-arbitrage principle states that ______
II. arbitrage opportunities present themselves regularly.
III. arbitrage profits cannot exist.
I. arbitrage profits must exist in a well-functioning market.
II. arbitrage opportunities present themselves regularly.
III. arbitrage profits cannot exist.
Correct Answer: III
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