This paper is an introduction to the mathematical theory of arbitrage. Examples of the graph-theoretic mathematics of arbitrage are given in economics, electrical circuit theory (Kirchhoff's voltage ...

Robert Kelly is managing director of XTS Energy LLC, and has more than three decades of experience as a business executive. He is a professor of economics and has raised more than $4.5 billion in ...

In the 1960s, Jack Treynor, William F. Sharpe, John Lintner, and Jan Mossin developed the capital asset pricing model (CAPM) to determine the theoretical appropriate rate that an asset should return ...

The well known Capital Asset Pricing Model asserts that only a single number--an asset's "beta" against the market index--is required to measure risk. Arbitrage Pricing Theory asserts that an asset's ...