1.4 Individual Share Portfolio Review assessment brief Essay

1.4 Individual Share Portfolio Review assessment brief - Essay Example In this regard, there is regulation of any form of fraud. The form of payment mode that the targeted shareholders prefer determines the strategies to be adopted by the arbitrageur in the trading process. There are two types of payment methods in a share performance analysis. In a stock merger, there is receipt of bid stocks by the targeted shareholders. On the other hand, share portfolio review shows how a share trader buys and sells stock to the highest bidder at the offer price after the completion of the bid exercise (Fernholz, 2012, 34). This type of investment entails the buying of stock and consequent selling of the bid stock at a suitable offer price. After the trading is completed, the target stock is exchanged for the bidder stock in order to cover the short position. The stock analyst can benefit from the trading when the bid succeeds. Therefore, if the bid does not go through, then the investor remains at the break-even state. The disclosure of information used by the stock analyst in decision-making is crucial because it makes him more a versed with the bid in quest. The graph indicates the fluctuation in prices of the shares within the share portfolio over the period. Share portfolio review uses of only public information with regard to bids. Therefore, it is not a covert deal with concealed information. Guiso (2012, 47) asserts that the trading is not subject to rumor information but investors only respond when a sealed deal on a bid has been announced to the public domain. Stock analysts believe that profitable trading is not contingent on a bid occurrence. The period set for the bid to be consummated is the overriding factor in the business. Risk is a crucial aspect in risk arbitrage because the whole process of risk spread involves some element of uncertainty. The result of the bid is usually unknown to the public. This owes to the fact that it may result to a profit or loss. For instance,