The no$-$arbitrage principle suggests$/$implies:

$($Select all that are true$)$

Question $7$Answer

a$.$

That there is $"$no free lunch" when it comes to investing. What you receive in expected return you pay in risk.

b$.$

That the government has prevented arbitrages by employing laws against insider trading

c$.$

That after accounting for costs of trading, two substitute goods$/$investments should command the same price

d$.$

That stock prices can only decline if loan origination slows

e$.$

That market frictions will be zero, trading will be continuous and hedging is effectively costless

f$.$

That arbitrages are the only kind of investments that are available in the economy