Merger arbitrage is a lesserknown investment strategy among the general investing public. Capital structure arbitrageurs focus on individual issuers.They look for valuation differentials between a company's debt and equity securities. Arbitrage is the simultaneous purchase and sale of the same asset in different markets in order to profit from a difference in its price. Then arbitrage ensures that in equilibrium all firms have the same market value. Find a glossary of financial terms and definitions for each. In particular, prices are quoted for every possible security and both firms and consumers take these prices as given. Working capital expenditures and replacement proceeds definition. An arbitrage opportunity is defined here as: a riskless trading strategy that generates a positive profit with no net investment of funds. The Barclays Capital Mortgage Bond Index is a broad measure of the performance of mortgage-backed bonds in the U.S. market.