Question: Idiosyncratic volatility is commonly considered a limit to arbitrage because Limited volatility of idiosyncratic arbitrage imposes no-trade bounds All of the answers are correct The

Idiosyncratic volatility is commonly considered a "limit to arbitrage" because Limited volatility of idiosyncratic arbitrage imposes "no-trade" bounds All of the answers are correct The people providing capital to a fund do not know the true ability of the fund It can render positions risky even if those positions are not exposed to any systematic risk

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