Negative Arbitrage

Business, Legal & Accounting Glossary

Definition: Negative Arbitrage


Negative Arbitrage


Full Definition of Negative Arbitrage


This refers to a lost opportunity where a municipal bond issuer will assume the proceeds from debt offerings and then take that money to invest it for a specific period of time until the funds are used for a project or to repay the investors. When the money is reinvested and the issuer of the debt earns a return that is less than what must be repaid to investors, then there is a lost opportunity.


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Definition Sources


Definitions for Negative Arbitrage are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.