Complete 8 page APA formatted essay: Stock Index Futures Prices.
Download file to see previous pages…
Arbitrage is also characterised as the simultaneous buying and selling of stocks in two separate financial markets with the intention of making profits generated by the difference between the buying and the selling prices of a commodity(Sackman, and Coltman 1996, 25). The carry cost can also be described as the interest expense paid by the investor to hold on to the commodity purchased in the futures market until the maturity date of the futures contract(Bjrk 2004, 1). Arbitrage will be further discussed below.