Examlex
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Arbitrage Opportunity
The opportunity to purchase a financial instrument at a reduced cost in one marketplace and sell it at an elevated price in a different marketplace to capitalize on the discrepancy between the two prices.
Risk-Free Rate
The theoretical return on an investment with zero risk, often represented by the yield on government securities such as U.S. Treasury bills.
Expected Return
The weighted average of all possible returns for an investment, taking into account the probabilities of each outcome, and a key concept in portfolio management and capital budgeting.
Factor Sensitivities
Refers to the responsiveness of an asset's return to changes in underlying factors, often used in the context of multifactor models to evaluate investment risk.
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