A financial analyst notices that the same stock is trading for different prices on two different exchanges.
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Question:
A financial analyst notices that the same stock is trading for different prices on two different exchanges. The stock is trading for $100 on Exchange A and $102 on Exchange B. The analyst believes that there is an opportunity for arbitrage and wants to take advantage of it. The analyst has $10,000 available to invest and can trade without incurring any transaction costs. How many shares of the stock can the analyst buy on Exchange A and sell on Exchange B in order to make a risk-free profit?
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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