Arbitrage is more than just a movie that was released a couple of years ago. The story line in the movie created the complicated world of this process and the importance of a clear understanding of what needs to be accomplished in order to be in compliance. A key element of this is the arbitrage rebate.
What Is the Rebate?
Many cities or municipalities will issue a bond for various projects that the group is working on. When this additional money is received, often times it is invested in other vehicles in order to make a profit. The amount of money received in these instances is considered a rebate. They can be both positive and negative in nature depending upon all the elements surrounding a specific investment. These rebates are monitored closely to make sure that they meet all tax laws. It is also a method to make sure that agencies are appropriately using funds that they have received in this manner. Continue reading