BANKING AFFAIRS

Detailed explanation-1: -A successful arbitrageur profits by simultaneously purchasing financial assets at a lower price and selling them at a higher price, pocketing the difference. By taking advantage of the inefficiencies, arbitrageurs can earn risk-free profits because the financial assets being traded are equivalent.

Detailed explanation-2: -Arbitrage is trading that exploits the tiny differences in price between identical or similar assets in two or more markets. The arbitrage trader buys the asset in one market and sells it in the other market at the same time to pocket the difference between the two prices.

Detailed explanation-3: -Riskless Arbitrage The act of buying an asset and immediately selling the same asset for a higher price. For example, one may execute two orders at once, one to buy a security at $10 and one to sell the same security at $12.

Detailed explanation-4: -The arbitrageurs reap a margin from the varying price of the same commodity in two different exchanges or markets. It is a practice that takes advantage of market inefficiency. The same commodity, currency, or asset is priced differently in two or more distinct markets.