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Select the stocks for the long side of your position. Try to make your total position as close as possible to a riskless arbitrage position
Select the stocks for the long side of your position. Try to make your total position as close as possible to a riskless arbitrage position - a position that requires no money down and exposes you to no systematic risk. You may assume that the CAPM is the correct model for measuring the systematic risk. Please report your investment in each stock you buy, as well as the appropriate firm characteristic for each stock bought and sold short that you rely on to form the total portfolio with no systematic risk. (20 points) select five stocks.
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