Capital structure arbitrageurs focus on individual issuers. They look for valuation differentials between a company's debt and equity securities.With the arbitrageur's SDF. This paper contains an extensive and robust study investigating capital structure arbitrage. Arbitrage is the simultaneous purchase and sale of the same asset in different markets in order to profit from a difference in its price. In merger arbitrage, arbitrageurs purchase a target company's stock at a discount (or "spread") to the merger consideration that's being offered. It is the policy of the Treasurer to invest public funds in accordance with all federal, state, and local governing statutes. The California Debt and Investment Advisory Commission (CDIAC) provides information, education, and technical assistance on debt issuance and public. Arbitrage, factor structure, and mean- variance analysis on large asset markets. Econometrica, 51 (1983), 5, 1281–. 1304.