1. Arbitrage is a transaction designed to capture profits resulting from market efficiency.

a. True

b. False

2. If one portfolio always provides a return at least as high as another portfolio, then that portfolio will have a price no less than that of the other portfolio.

a. True

b. False

3. The majority of derivatives exchanges in the U.S. are fully automated.

a. True

b. False

4. A hedge fund is a very risky form of investment.

a. True

b. False

5. The theoretical fair value is the only value an asset can have.

a. True

b. False