Describe the riskless arbitrage strategies that will yield


1. Describe the riskless arbitrage strategies, that will yield the CAPM alpha and the Carhart alpha as the expected return. (Hint: The momentum factor buys recent winners and shorts recent losers)

2. Do you think that the alpha from question 1 overesitamtes or underesimates the abnormal return you should expect to get from the short side of your stratgy going forward? (Hint: think about what is likely to have happend to the stocks you decided to short. The loading on the momentum factor may help in answering this question.)

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Financial Management: Describe the riskless arbitrage strategies that will yield
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