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Certainty |
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CertaintyPrecise knowledge of an economic variable, as opposed to belief that it could take on multiple values. Contrasts with uncertainty. One aspect of complete information.Similar MatchesEndogenous uncertaintyEndogenous uncertaintyDescribes factors within the control of the firm, such as a decision to reveal information about price or input costs. Converse of exogenous. Inflation uncertaintyInflation uncertaintyThe fact that future inflation rates are not known. It is a possible contributing factor to the makeup of the term structure of interest rates. Price uncertaintyPrice uncertaintyChance that the future price of an asset will change. Certainty Equivalent ReturnCertainty Equivalent ReturnThe certain (zero risk) return an investor would trade for a given (larger) return with an associated risk. For example, a particular investor might trade an uncertain expected 4% active return with 6% risk, for a certain active return of 1.5%. Certainty equivalentCertainty equivalentAn amount that would be accepted today (risk free) in lieu of a chance to receive a possibly higher, but uncertain, amount. Further SuggestionsUncertainty |
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