Law of one price


 

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Law of One Price

The principle that identical goods should sell for the same price throughout the world if trade were free and frictionless.

Law of one price

An economic rule stating that a given security must have the same price no matter how the security is created. If the payoff of a security can be synthetically created by a package of other securities, the implication is that the price of the package and the price of the security whose payoff it replicates must be equal. If it is unequal, an arbitrage opportunity would present itself.



Law of one price

Similar Matches

Clean price

Clean price

Bond price excluding accrued interest.


Price uncertainty

Price uncertainty

Chance that the future price of an asset will change.


Bargain purchase price option

Bargain purchase price option

Gives the lessee the option to purchase the asset at a price below fair market value when the lease expires.


Shadow price

Shadow price

The implicit value or cost associated with a constraint. That is, the increased value that will be achieved by relaxing the constraint by one unit. When foreign exchange is rationed, the shadow price of foreign exchange becomes the relevant exchange rate decisions.


Target price

Target price

In the context of takeovers, the price at which an acquirer aims to buy a target firm. In the context of options, the price of the underlying security at which an option will become in the money. In the context of stocks, the price that an investor hopes a stock will reach in a certain time period.


Further Suggestions

Implicit price deflator
Constant prices
Strike price
Price line
Settlement price
Tokyo Stock Price Index
Price inelastic
Price taker
"Customer picking prices"
Price ceiling
Retail Price Index
price earnings ratio (P/E ratio)
Nominal price
Price undertaking
Autarky price
Basic import price
Tough on price
Upset price
Exchange Delivery Settlement Price
Price immunization
Miss the price or market
Market price
Relative price
subscription price
Asked price


 
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