The correct answer is: B. Arbitrage
Arbitrage is the simultaneous purchase and sale of an asset in different markets or in different forms in order to profit from a difference in the asset’s price. It is a risk-free way to make a profit, and it is the process that eliminates riskless profit opportunities in the futures market.
Hedging is a way to reduce risk by taking an offsetting position in another market. For example, a farmer might hedge against the risk of a decline in the price of corn by selling corn futures contracts.
Speculation is the purchase of an asset in the hope that its price will increase in the future. Speculators are willing to take on risk in the hope of making a profit.
Diversification is the process of spreading your investment across different asset classes, sectors, and countries. This can help to reduce your risk by minimizing the impact of any one investment on your overall portfolio.