Question: 5) (15 points) Consider the following statement: Behavioral biases should not cause mispricing in the long run because rational arbitrageurs correct any misalignment in prices

5) (15 points) Consider the following statement: Behavioral biases should not

5) (15 points) Consider the following statement: Behavioral biases should not cause mispricing in the long run because rational arbitrageurs correct any misalignment in prices and keep prices at fair levels". Do you agree or disagree with this statement? Explain briefly by providing specific reasons. c L M

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