Arbitrage is the simultaneous purchase and sale of the same asset in different markets in order to profit from a difference in its price. For issuers of tax-exempt bonds, these challenges can largely be summed up in a single word: arbitrage.If a city changes it's policy to cap LTR's or ban them all together, for example Champlin MN and Maple Grove MN, that can have impact. Arbitrage is the act of taking advantage of a price difference in two different markets. Discuss the definition of arbitrage, how it relates to economics, and it's importance.