Question 1 5 points Save Answer Consider an arbitrage strategy involving share-classes A and B of stock X. Stock X-A is trading at $75 and X-B is trading at $100. Suppose that you short-sell $150,000 of the relatively expensive share X- B, and buy $150,000 of the relatively cheaper X-A. In which of the following situations will you make a positive return on your investment (ignoring trading costs and financing costs)? Choose all that apply. You can assume that the arbitrageur closes the long and short positions after observing the prices below so that any profits/losses are realized. Choose all that apply_(multiple answer). A. The stock price for X-A increases to $100 and X-B remains at $100. B. The stock price for X-B decreases to $75 and X-A remains at $75. OC. The stock price for X-A and X-B converge at $87.5 OD. The stock price for X-A increases to $95, and the stock price for X-B increases to $105. E. The stock price for X-A decreases to $70 and the stock price for X-B decreases to $80. F. The stock price for X-A decreases to $70 and X-B increases to $105. Question 1 5 points Save Answer Consider an arbitrage strategy involving share-classes A and B of stock X. Stock X-A is trading at $75 and X-B is trading at $100. Suppose that you short-sell $150,000 of the relatively expensive share X- B, and buy $150,000 of the relatively cheaper X-A. In which of the following situations will you make a positive return on your investment (ignoring trading costs and financing costs)? Choose all that apply. You can assume that the arbitrageur closes the long and short positions after observing the prices below so that any profits/losses are realized. Choose all that apply_(multiple answer). A. The stock price for X-A increases to $100 and X-B remains at $100. B. The stock price for X-B decreases to $75 and X-A remains at $75. OC. The stock price for X-A and X-B converge at $87.5 OD. The stock price for X-A increases to $95, and the stock price for X-B increases to $105. E. The stock price for X-A decreases to $70 and the stock price for X-B decreases to $80. F. The stock price for X-A decreases to $70 and X-B increases to $105