What is the minimum percentage of funds that SEBI mandates AMCs to invest in arbitrage strategies for a fund to be classified as an Arbitrage fund?

35% 50% 65% 80%

What is the key characteristic of a pure arbitrage trade, such as spot-futures arbitrage, in terms of risk and outcome?

High risk, unpredictable outcome Low risk, predictable outcome Moderate risk, predictable outcome High risk, predictable outcome

What is the typical investment strategy for the remaining portion of funds (outside the mandated arbitrage portion) in an Arbitrage fund?

Long-term equity investments Real estate investments Debt funds Commodities trading

What is the primary factor that can introduce volatility into an Arbitrage fund's performance?

Fluctuations in the stock market Changes in interest rates The debt component of the portfolio Geopolitical events

What is considered the 'real arbitrage' in an arbitrage fund, according to the text?

Exploiting price differences between cash and futures markets Profiting from discrepancies in international markets The tax advantage of being treated as an equity fund while behaving like a debt fund Taking advantage of short-term market inefficiencies

What is the phenomenon called when the price of a stock in the cash market and its corresponding futures contract converge to the same value on the expiry date?

Futures convergence Spot-futures parity Cash-futures convergence Arbitrage equilibrium

What is the term used to describe the difference between the price of a stock in the cash market and its corresponding futures contract?

Premium Discount Spread Basis