Arbitrageurs may be unable to exploit behavioral biases due to I) fundamental risk. II) implementation costs. III) model risk. I

Question

Shkiper50 [21]

2 years ago

3

Arbitrageurs may be unable to exploit behavioral biases due to I) fundamental risk. II) implementation costs. III) model risk. I

V) conservatism. V) regret avoidance.

Business

1 answer:

Daniel [21] · Answer 1 · 2023-04-01T16:49:54+03:00

Answer: I, II, and III

Explanation: Arbitrageur is one who engages in arbitrage ( a market activity in which security, commodity, currency, or other tradable item is bought in one market and sold simultaneously in another, in order to profit from the price differences between the markets), such as a financial broker, or an investment bank. Arbitrageurs may be unable to exploit behavioral biases due to fundamental risk, implementation costs, and model risk.