HOME | Definition of risk arbitrage (RISK ARBITRAGE, Risk arbitrage)
A hedge fund strategy that involves a portfolio manager buying the stock of a company that he believes will be acquired and selling the stock of the company that he believes will be the acquirer.
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arbitrage involving risk; as in the simultaneous purchase of stock in a target company and sale of stock in its potential acquirer; if the takeover fails the arbitrageur may lose a great deal of money
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