An Arbitrage Opportunity Is Any Situation in Which

Multiple Choice

An arbitrage opportunity is any situation in which

A) Your estimated probability of a stock appreciating in price is three times that of the stock falling in price, and you hold a long position in the stock.
B) An insider trading on privileged information is able to make supernormal profits.
C) You are able to generate superior risk-adjusted returns to the market.
D) You can construct a strategy whose cash flows are non-negative at all times with at least one positive cash flow at one or more points in time.