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Question : The process of buying and selling securities on the same day is known as:

Option 1: Arbitrage
  

Option 2: Short selling
 

Option 3: Dividend reinvestment

    

Option 4: Options trading


Team Careers360 14th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Arbitrage
  


Solution : The correct answer is (a) Arbitrage.

The process of buying and selling securities on the same day is known as arbitrage. Arbitrage is a trading strategy where traders take advantage of price discrepancies between different markets or securities to make a profit with minimal risk. Arbitrage seeks to exploit temporary inefficiencies in the market, aiming to generate profit from the price discrepancies that may occur due to factors such as market inefficiencies, differences in supply and demand, or delays in information dissemination.

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