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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.
Reed Keeling
Wiki User
∙ 11y agoThe term profitability generally means to gain something. This can be in a variety of different ways. Commonly, it is meant in terms of gaining money or knowledge.
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Short-term creditors are usually most interested in assessing?
profitability
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Short-term creditors are usually most interested in assessing?
profitability
A short-term creditor would be most interested in?
profitability
How do you calculate long term solvency and profitability ratio?
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What is trend analysis?
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What is a profitability index?
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What is feasibility analysis?
The analysis of how feasable something is. i.e. can you afford it. whilst looking at other factors such as long term profitability.
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How is the profitability of a scheme determined?
how is the profitability of scheme determined
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profitability ratios?
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