Markets are efficient when prices adjust rapidly to new information, continuous markets exist, and large dollar trades can be absorbed without large price movements True or False True False

Arbitrage is the practice of making money by simultaneously buying in one market and selling in another.  It takes advantage of price differences between the two or more markets. Give an example and explain how is this possible. Give enough detail that we can understand the basics of the transaction.

Behavioural finance is arguably most useful in explaining asset prices when there are significant numbers of “noise traders” and limits to arbitrage. Why is this so?