Cookies?
Library Header Image
LSE Research Online LSE Library Services

Arbitrage strategy

Kardaras, Constantinos (2010) Arbitrage strategy. In: Cont, Rama, (ed.) Encyclopedia of Quantitative Finance. John Wiley & Sons, Chichester, UK. ISBN 9780470057568

Full text not available from this repository.

Identification Number: 10.1002/9780470061602.eqf04001

Abstract

A (riskless) arbitrage strategy allows a financial agent to make certain profit out of nothing, that is, out of zero initial investment. This has to be disallowed on economic basis if the market is in equilibrium state, as opportunities for riskless profit would result in an instantaneous movement of prices of certain financial instruments. The principle of not allowing for arbitrage opportunities in financial markets has far-reaching consequences, most notably the option-pricing and hedging formulas in complete markets.

Item Type: Book Section
Official URL: http://www.wiley.com/
Additional Information: © 2010 John Wiley & Sons, Ltd
Divisions: Statistics
Subjects: H Social Sciences > HG Finance
Sets: Departments > Statistics
Date Deposited: 04 Dec 2017 11:22
Last Modified: 15 Jun 2020 23:08
URI: http://eprints.lse.ac.uk/id/eprint/85936

Actions (login required)

View Item View Item