4 ms·

Any hypothesis that violates the zero-arbitrage principle should be taken with a grain of salt.

• Dylan16807 9y ago
  "We don't want this business because it makes it harder to do business elsewhere" also does not violate that principle. So that rule of thumb, while nice, doesn't help a whole lot here.
• khazhoux 9y ago
  explain?
  • quickthrower2 9y ago
    A situation in which all relevant assets are priced appropriately and there is no way for one's gains to outpace market gains without taking on more risk. Assuming an arbitrage-free condition is important in financial models, thought its existence is mainly theoretical.
• deleted 9y ago
  [deleted]