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It means buying stocks and shares, commodities, currencies, etc. on one market and immediately selling them on another market in order to earn profit from the difference in price. A certain commodity may have may have different prices at the same time in the same or different markets. Alert businessmen buy it from the market where its price is low and sell it where its price is comparatively high and, thus, they earn profit due to the difference in prices. In other words, arbitrage is the process of holding business transactions simultaneously in different markets to earn profit because of difference in prices.
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