Thought id share this. So one of my buds works for a fund of funds group in chicago and had a phone interview with a kid from UVA. So he begins asking the kid what an arbitrage was and wanted an example of a possible strategy and the kid gives a mcdonalds example. LoL i guess he said something along the lines of instead of purchasing the ten piece for $4.39 you can make a profit by buying three $1 4 piece. Just shows how much the Business week rankings are a joke.
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What's wrong with that example?
that's actually a decent example considering it was on the fly.
Looks like your douchebag friend had it in for the guy before the interview even started.
He needed to add that the only 'arbitrage' in that example is if he could then sell the four pieces for a .39 profit. That is what arbitrage is all about..getting something for nothing
Something tells me dipsy doesn't know what an arbitrage opportunity is.
Still with mark to market, it's booked P&L
I'd much rather hear a comical response like this than hear the same stock answer over and over again.
I think he gave a good response. It not only shows he knows his stuff but most importantly show he has a sense of humor.
That example is not really arbitrage. Arbitrage is a riskless profitable action. Trying to resell mcnudgets to random people on the street is not riskless, who would buy mcdonalds from some dude on the street.
HOWEVER, if the guy gets an agreement beforehand (let's say from his friends) that they will buy them from him THEN it is true arbitrage.
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