Players in financial markets 8Borrowers:need fundsLenders / investors:wish to invest fundsHedgers:want to reduce riskSpeculators:are willing to take riskArbitrageurs:lock in profits by exploiting market inefficienciesArbitrage opportunity / profit:riskless profit with zero initial investmentArbitrage strategy: buy cheap and sell expensiveFinancial Intermediaries (FI)
Introduction to financial markets