Certainty equivalent


 

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Certainty equivalent

An amount that would be accepted today (risk free) in lieu of a chance to receive a possibly higher, but uncertain, amount.



Certainty equivalent

Similar Matches

Equivalent strategy

Equivalent strategy

An options strategy which has the same risk-reward profile as another strategy. For example, a long May 60-65 call vertical spread is equivalent to a short May 60-65 put vertical spread.


Equivalent variation

Equivalent variation

The amount of money that, paid to a person, group, or whole economy, would make them as well off as a specified change in the economy. Provides a monetary measure of the welfare effect of that change that is similar to, but not in general the same as, compensating variation.


Equivalent annual benefit

Equivalent annual benefit

The annual annuity with the same value as the net present value of an investment project.


Corporate equivalent yield

Corporate equivalent yield

A comparison of the after-tax yield of government bonds selling at a discount and corporate bonds selling at par.


Cash and equivalents

Cash and equivalents

The value of assets that can be converted into cash immediately, as reported by a company. Usually includes bank accounts and marketable securities, such as government bonds and bankers' acceptances. Cash equivalents on balance sheets include securities that mature within ninety days.


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annual equivalent rate
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equivalent pension benefit
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Equivalent bond yield
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Ad valorem equivalent
Corporate taxable equivalent


 
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