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Are the two following statements correct? Statement 1: Arbitrage is the creation of riskless profits made possible by relative mispricing among securities. Statement 2: The

Are the two following statements correct? Statement 1: Arbitrage is the creation of riskless profits made possible by relative mispricing among securities. Statement 2: The average beta for all stocks in the market is 1.0.

A.

Yes

B.

No. Both statements are incorrect.

C.

No. Only statement 1 is correct.

D.

No. Only statement 2 is correct.

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