:Arbitrage in futures market will be profitable if 3 (2 ) The investor will open a short position in index futures contracts for S&P 500 and simultaneously it will make short selling of shares included in the stock index Nikkei 225 if the theoretical index futures contract is being valued with higher price than its current market value. The investor will open a short position in index futures O contracts for Nikkei 225 and simultaneously will make short selling of shares included in the stock index S&P .500 if the theoretical index futures contract is being valued with lower price than its current market value The investor will open a long position in index futures contracts for S&P 500 and simultaneously it will make a short selling of shares included in the stock index S&P 500 if the theoretical index futures contract is being valued with higher price than its current market value. The investor will open a short position in index futures O contracts for S&P 500 and simultaneously will purchase shares included in the stock index S&P 500 if the .theoretical index futures contract is being valued with lower price than its current market value he investor will open a long position in index futures contracts for S&P 500 and simultaneously it will make a short selling of shares included in the stock index S&P 500 if the theoretical index futures contract is being valued with lower price than its current market value. The investor will open a short position in index futures O contracts for S&P 500 and simultaneously will purchase shares included in the stock index S&P 500 if the theoretical index futures contract is being valued with higher price than its current market value The investor will open a short position in index futures contracts for S&P 500 and simultaneously it will make a short selling of shares included in the stock index S&P 500 if the theoretical index futures contract is being valued with higher price than its current market value. The investor will open a long position in index futures O contracts for S&P 500 and simultaneously will purchase shares included in the stock index S&P 500 if the .theoretical index futures contract is being valued with lower price than its current market value There are three types of foreign exchange risk 4 (2 ) ransaction risk is the risk that a company faces when it's selling a product from a company located in another country. The price of the product will be denominated in the selling company's currency. If the selling company's currency were to depreciated versus the selling company's currency then the company doing the selling will have to make a larger payment in its base currency to meet the contracted price. Translation risk happens when a parent company owning a subsidiary in another country could face losses when the subsidiary's financial statements, which will be denominated in that country's currency, have to be translated back to the subsidiary's currency. Economic risk refers to when a company's book value is continuously impacted by an unavoidable exposure to currency fluctuations Transaction risk is the risk that a company faces when it's buying a product from a company located in the same country. The price of the product will be denominated in the buying company's currency. If the selling company's currency were to appreciate versus the buying company's currency then the company doing the buying will have to make a lower payment in its base currency to meet the contracted price. Translation risk happens when a parent company owning a subsidiary in another country could generate profits when the subsidiary's financial statements, which will be denominated in that country's currency, have to be translated back to the parent company's currency. Economic risk refers to when a company's market value is .continuously impacted by an unavoidable exposure to interest rate fluctuations Transaction risk is the risk that a company faces when it's buying a product from a company located in another country. The price of the product will be denominated in the selling company's currency. If the selling company's currency were to appreciate versus the buying company's currency then the company doing the buying will have to make a larger payment in its base currency to meet the contracted price. Translation risk happens when a parent company owning a subsidiary in another country could face losses when the subsidiary's financial statements, which will be denominated in that country's currency, have to be translated back to the parent company's currency, Economic risk refers to when a company's market value is .continuously impacted by an unavoidable exposure to currency fluctuations