Statistical Arbitrage Is a Version of a ______ Strategy

question 9

Multiple Choice

Statistical arbitrage is a version of a ______ strategy.

• A) market neutral
• B) directional
• C) relative value
• D) divergence
• E) convergence

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Definitions:

Implicit Costs

The opportunity costs of using resources owned by the firm for its current purposes rather than the next best alternative uses.

Accounting Profits

Accounting profits refer to the net earnings of a company as calculated by subtracting total expenses from total revenues, using standard accounting principles.

Economic Profits

The difference between total revenues and total costs, including both explicit and implicit costs, indicating the profitability of a company beyond basic accounting measures.

Economic Losses

Financial losses that occur when the cost of production exceeds the revenue generated from sales.