Arbitrage is the practise of taking advantage of security mispricing in order to generate profits without taking any risks.
What is profit?
In accounting, a profit is an income that is given to the owner during a successful market production process (business). Profitability, which is the owner's primary interest inside the income-formation process of market production, is measured by profit. There are several profit metrics that are frequently used. Income generation and distribution must always be balanced in order for income to be formed in market production. Within the review period, the generated income is consistently distributed as economic value to the production's stakeholders. The portion of income formation that the owner is able to retain for themselves during the income distribution process is known as the profit. Profit is one of the main drivers of economic prosperity because it creates opportunities for growth in both income and production. In this context, the terms "income," "profit," and "earnings" are interchangeable.
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