n NISM Certifications
X NISM Series X
Medium

What is the term for the simultaneous purchase and sale of the same asset in different markets?

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Trading

  2. B

    Speculation

  3. Arbitrage

    Correct answer

  4. D

    Hedging

Why this is the answer

Arbitrage involves exploiting price differences in different markets by simultaneous buying and selling.

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