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Arbitrage profit is profit derived from a riskless (or near riskless) transaction.
For example, say gold is selling on the London exchange for $800 per oz and gold is selling on the New York exchange for $804 per oz. Buying one oz of London gold and selling one oz of New York gold (trades in close proximity) provides an arbitrage profit of $4 (less transaction fees).
The purchase and sale will likely have the effect of increasing the price of London gold and decreasing the price of New York gold. So for every subsequent trade, the arbitrage profit will be lower and lower until the prices are at parity.
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Define the term investment?
Investement is a term that means we use some money or other things like buildinngs mechineary to earn profit. Some time company or owner investement and he get some profit and some times he suffer loss. Any how investment plays a very important role for the succes of ecnomy of any country.
What does the term factoring money mean?
The term 'factoring money' means selling debt one is owed to a company who take over responsibility for collecting that money. They earn a profit by paying less than the value of the money owed to you.
What percentage profit will a grocer make on an article he brought for 40.00 if he sold it for 50.00?
25% profit. Thats 25% mark up so that means 20% profit on return: MJC
What is arbitrage process?
Arbitrage is process of utilising differences in price in two markets to make financial gains. Generally each market has a different demand-supply position and hence price of same product is different in different market.
What are arbitrage situations?
An example of arbitrage was declared against a county that obtained $10 million in bonds for the purpose of developing a landfill. Some of the bond money was used for a land purchase and engineering studies. For several reasons the landfill was never built. The county put the remaining bond money into CDs at their local bank and drew a higher rate of interest than they were paying bondholders. The government charged the county with arbitrage and charged a fine.
