Compute the arbitrage profit. Arbitrage is the simultaneous purchase and sale of the same asset in different markets in order to profit from a difference in its price.Give a full definition of arbitrage. Inefficient because it exhibited many "violations of the gold points. Coming back to the roots of the problem, Clark (1993) gives a nice ex- position of Ross' definition of arbitrage and points out that arbitrage is an. MGMT 4053 - Responsible Management in a Global Economy. In the theory of frictionless market, usually, d = 1; for models with transaction costs d is the number of assets in the portfolio. We define also the set A0.