To Take Advantage of an Arbitrage Opportunity, an Investor WouldI)

Multiple Choice

To take advantage of an arbitrage opportunity, an investor wouldI) construct a zero-investment portfolio that will yield a sure profit.II) construct a zero-beta-investment portfolio that will yield a sure profit.III) make simultaneous trades in two markets without any net investment.IV) short sell the asset in the low-priced market and buy it in the high-priced market.

A) I and IV
B) I and III
C) II and III
D) I, III, and IV
E) II, III, and IV