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A. Option C
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NEW QUESTION: 3
Two stocks have identical risk, but one of them offers a higher expected return than the other. This apparent inefficiency in the market:
A. indicates that arbitrageurs must be unaware of the mispricing.
B. may persist and even grow larger before any correction occurs.
C. can only arise when arbitrageurs lack the capital to exploit the situation.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
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Feedbacks
Aalk - 2014-05-05 16:45:18
Plato - 2014-05-05 16:45:51
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Eleanore - 2014-09-28 16:36:48