Question

When you buy at a low price in one market then sell at a higher price in another market you are engaging in:__________

Answer 1

The answer is abitrage

Step-by-step explanation:

Abitrage is sometimes called riskless profit. It is about taking advantage of price difference in the market. Abitrage improves market efficiency because the mispricing are quickly exploited.

Arbitrage involves buying security A at $10 in city X and the same security is being sold for $15 in city Y. If the market participant exploits this mispricing, he is known to engage in abitrage.