In principle, simultaneous execution of transactions at known prices producing offsetting future cash flows makes arbitrage riskless.
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In principle, simultaneous execution of transactions at known prices producing offsetting future cash flows makes arbitrage riskless. However, in practice, even in the simplest scenarios, such arbitrage does involve several risks. What are these risks?
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These risks to arbitrage might be summarized as follows Implementation risk arises because transacti...View the full answer
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