CFA Practice Question
Good Z can be bought and sold on both Market #1 and Market #2. Which of the following sets of prices for Good Z conform(s) to the no-arbitrage principle?
II. Market #1 = $125; Market #2 = $115
III. Market #1 = $87; Market #2 = $87
I. Market #1 = $75; Market #2 = $75
II. Market #1 = $125; Market #2 = $115
III. Market #1 = $87; Market #2 = $87
A. I and II
B. I and III
C. II and III
Explanation: II illustrates irrational pricing and does not conform to the no-arbitrage principle.
User Contributed Comments 0
You need to log in first to add your comment.