Q. Consider the following statements:

1. To execute an arbitrage deal, one has to simultaneously enter into deals in two markets where a price differential exists.
2. There are Mutual funds that can help investors engage in arbitrage.

Which of the above statements is / are correct?
Answer: Both 1 and 2 are correct
Notes: Arbitrage involves exploiting price differences between two markets by simultaneously entering trades to earn riskless profit. This confirms statement 1. Statement 2 is also correct because mutual funds offer arbitrage schemes, enabling investors without technical expertise to benefit from such price differentials. Both statements are therefore accurate regarding the mechanisms and availability of arbitrage opportunities.