Hull’s explanation is that arbitrage opportunities do not last because arbitrageurs quickly exploit them.

Once an obvious mispricing appears, traders enter the market to take the opposite side of the mispricing. Their trading pressure helps bring prices back into line, so the opportunity disappears.

• Efficient markets are a broader outcome, but not the immediate mechanism.
• Transaction costs can limit arbitrage, but they do not explain why opportunities vanish so quickly.
• Information technology may speed up the process, but the key driver is still arbitrageurs acting on the mispricing.

So the best answer is B.