An Exchange-Traded Fund (ETF) is a security that represents a portfolio of individual stocks. Consider an ETF
Question:
Stock .. Current Market Price
HPQ ........ $28
SHLD ...... $40
GE ........ $14
a. What is the price per share of the ETF in a normal market?
b. If the ETF currently trades for $120, what arbitrage opportunity is available? What trades would you make?
c. If the ETF currently trades for $150, what arbitrage opportunity is available? What trades would you make?
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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