Research preview

The news that the United States and China are likely to sign a tariff agreement this month has sent ripples through global markets. A projected 82 % probability of a deal suggests a rapid shift in trade policy risk, which directly affects expected returns, risk premia, and the performance of many quantitative strategies. This article connects that macro‑event to core concepts from an advanced investments curriculum and shows how traders can adjust models and portfolios in response. Rethinking the Risk‑Free Rate and Expected Returns When trade tensions ease, the perceived sovereign risk premium on both US and Chinese assets tends to fall....