Buying a good or asset in one market and simultaneously selling in another market where the price is higher. This earns a profit (the difference between the two prices) but does not involve taking any risk. In a financial market arbitrage can involve short-selling one asset, or portfolio, and using the funds to purchase another. Provided the assets (or portfolios) have the same return and risk characteristics this is risk-free. Arbitrage tends to prevent the price of the same good or asset in different markets from moving further apart than a margin equal to transactions costs. Interest arbitrage is borrowing in a market with lower interest rates and simultaneously lending in a market with higher ones. See also no arbitrage.