This note introduces the concept of risk or merger arbitrage. Risk arbitrage is an investing method that attempts to capitalize on announced transactions pertaining to mergers, spin-offs, takeovers, liquidations, and corporate restructuring. The arbitrageur attempts to create riskless profit by simultaneous purchases and/or sales of assets that are part of an announced transaction. In the note, we outline the basics types of deals — including cash mergers, stock mergers, cash-stock deals and embedded options — and the methods to evaluate their profitability. The note also provides information on using Bloomberg’s mergers and acquisitions database and the Bloomberg M&A Analysis function to track pending transactions in the early and mid-2000s.