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Title: Which of the following statements regarding arbitrage and security prices is INCORRECT? Post by: johnpaech on Nov 19, 2017 Which of the following statements regarding arbitrage and security prices is INCORRECT?
A) We call the price of a security in a normal market the no-arbitrage price for the security. B) In financial markets it is possible to sell a security you do not own by doing a short sale. C) When a bond is underpriced, the arbitrage strategy involves selling the bond and investing some of the proceeds. D) The general formula for the no-arbitrage price of a security is Price(security) = PV (All cash flows paid by the security). Title: Re: Which of the following statements regarding arbitrage and security prices is INCORRECT? Post by: deusmaroto on Nov 19, 2017 Content hidden
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