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  1. Risk arbitrage

    Risk arbitrage, also known as merger arbitrage, is an investment strategy that speculates on the successful completion of mergers and acquisitions. An

  2. Arbitrage

    price. In principle and in academic use, an arbitrage is risk-free; in common use, as in statistical arbitrage, it may refer to expected profit, though losses

  3. Arbitrage pricing theory

    finance, arbitrage pricing theory (APT) is a general theory of asset pricing that holds that the expected return of a financial asset can be modeled as a

  4. Risk-neutral measure

    the unique risk-neutral measure. Such a measure exists if and only if the market is arbitrage-free. The easiest way to remember what the risk-neutral measure

  5. Statistical arbitrage

    statistical arbitrage (often abbreviated as Stat Arb or StatArb) is a class of short-term financial trading strategies that employ mean reversion models involving

  6. Model risk

    mitigating model risk resulting from volatility uncertainty. Buraschi and Corielli formalise the concept of 'time inconsistency' with regards to no-arbitrage models

  7. Asset pricing

    Risk factor (finance) Arbitrage-free price Rational pricing #Arbitrage free pricing #Risk neutral valuation Contingent claim analysis Brownian model of

  8. Fundamental theorem of asset pricing

    possibility of loss. Though arbitrage opportunities do exist briefly in real life, it has been said that any sensible market model must avoid this type of

  9. Rational pricing

    hence asset pricing models) will reflect the arbitrage-free price of the asset as any deviation from this price will be "arbitraged away". This assumption

  10. Capital asset pricing model

    portfolio. The model takes into account the asset's sensitivity to non-diversifiable risk (also known as systematic risk or market risk), often represented