The Law Dictionary

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ARBITRAGE Definition & Legal Meaning

Definition & Citations:

An investment strategy involving the simultaneous purchase and sale of two ASSETS in order to capitalize on small price or rate discrepancies. The intent of the strategy is to generate a profit with a minimum amount of RISK; true arbitrage is riskfree. See also HEDGE, LONG ARBITRAGE, PURE ARBITRAGE,QUASI ARBITRAGE, SHORT ARBITRAGE, SPECULATION,YIELD ENHANCEMENT.


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