Arbitrage profits??

Question

Can someone explain what forces would come in to play to eliminate arbitrage profits?

I need this for my assignment, thank you!

Answer 1

Expenses, settlement difficulties and costs. Maybe currency fluctuations. The profit is usually small and therefore has to be done on a large scale' There used to be a lot of arbitrage on South African stocks between London and SA (Johannesburg). As you know true arbitrage is a guaranteed profit or should be.