BANKING AFFAIRS

Detailed explanation-1: -Definition: Arbitrage is the process of simultaneous buying and selling of an asset from different platforms, exchanges or locations to cash in on the price difference (usually small in percentage terms). While getting into an arbitrage trade, the quantity of the underlying asset bought and sold should be the same.

Detailed explanation-2: -Arbitrage describes the act of buying a security in one market and simultaneously selling it in another market at a higher price, thereby enabling investors to profit from the temporary difference in cost per share.

Detailed explanation-3: -Capital Market is a market dealing in medium and long-term funds. It is an institutional arrangement for borrowing medium and long-term funds and which provides facilities for marketing and trading of securities.

Detailed explanation-4: -An example of arbitrage is when the stock of one firm is selling at a given price in one market and at a higher price in another and someone buys the stock for cheaper in the first market and sells it at a higher rate in the second.

Detailed explanation-5: -Capital market is a place where buyers and sellers indulge in trade (buying/selling) of financial securities like bonds, stocks, etc. The trading is undertaken by participants such as individuals and institutions. Capital market trades mostly in long-term securities.