sellers, imposing costs on investors and generating riskless profits
Pure arbitrage yields riskless profits
but is difficult to find in markets and if found, difficult to sustain.
That is, riskless profits
could be made by purchasing the corporation, selling all assets, repaying all debts, and pocketing the excesses.
To grab these Riskless Profits, though, there are several structural and measurement barriers and faulty paradigms that all parties must overcome.
Any organization truly serious about generating Riskless Profits needs to remove the flawed paradigms and conventional wisdoms about RPP (see Exhibit A).
To fully realize Riskless Profits, one must first accept that promotional sales lifts are truly incremental to the brand, category and retailer.
Once the lower-bound estimate is established, we can test for the potential to make Riskless Profits.
Even during bubbles and panics, which are prime moneymaking opportunities for savvy investors, there are no riskless profits
and no way to forecast market turning points.
This condition eliminates the possibility of earning riskless profits
from the interest rate differential.
Without this factor, investors could make riskless profits
through arbitrage operations.