What is arbitrage? Explain the arbitrage opportunity when the price of a dually listed mining company stock is $50 (USD) on the New York Stock Exchange and $60 (CAD) on the  Toronto Stock Exchange. Assume that the exchange rate is such that 1 USD equals 1.21  CAD. Explain what is likely to happen to prices as traders take advantage of this opportunity

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A: WEAK FORM EFFICIENT MARKET HYPOTHESIS: ALL PAST DATA ARE REFLECTED IN THE PRICES OF THE STOCK.

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Stock Market Indices

Stock indexes are used to compare the price fluctuations of a group of stocks of similar companies, which are combined based on a similar industry or a particular market capitalization limit or type of market. The price comparison is based on a pre-determined standard method or indicators. These stock indexes are usually considered a base for comparison of a particular stock, and the performance of that particular company can be easily determined.