- 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
Market participants that take advantage of misalignments between the prices of futures contracts and the prices of their underlying commodities to earn the riskless profit are called ______.
B. hedgers
C. arbitrageurs
D. traders
A. speculators
B. hedgers
C. arbitrageurs
D. traders
Correct Answer: C
User Contributed Comments 4
| User | Comment |
|---|---|
| rfvo | Why C? |
| Vikku | Only arbitrageurs make riskless profits. |
| ascruggs92 | The answer is C because that is the definition of arbitrage. |
| Inaganti6 | riskless profit = key word |