- CFA Exams
- CFA Level I Exam
- Topic 7. Derivatives
- Learning Module 4. Arbitrage, Replication, and the Cost of Carry in Pricing Derivatives
- Subject 1. Arbitrage and Replication
CFA Practice Question
An arbitrage opportunity would yield a profit based on ______.
B. a net investment of $0
C. a high level of risk
A. a net investment of $5
B. a net investment of $0
C. a high level of risk
Correct Answer: B
By definition, an arbitrage requires no net investment.
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