Current Affairs · Financial Markets
Which one of the following best describes the functioning of Arbitrage Funds?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1They primarily invest in long-term government securities to benefit from changes in interest rates.
- 2They seek to generate returns by exploiting temporary price differences of the same asset across markets or segments through near-simultaneous trades.✓
- 3They exclusively track benchmark stock indices and replicate index composition passively.
- 4They invest only in undervalued small-cap stocks expecting long-term capital appreciation.
Correct answer
They seek to generate returns by exploiting temporary price differences of the same asset across markets or segments through near-simultaneous trades.
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