Financial Risk and Statistical Arbitrage

The assignment delves into the concepts of statistical arbitrage and risk management in financial markets. It presents data on various assets (BHP, CBS, TLS, WOW) and calculates key financial metrics like beta coefficients, expected market returns, and required rates of return. The analysis considers different perspectives on risk-free rates and examines the impact of financial crises on arbitrage strategies. The assignment concludes by discussing the limitations of statistical arbitrage during periods of market instability.