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Law of one price |
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Law of One PriceThe principle that identical goods should sell for the same price throughout the world if trade were free and frictionless.Law of one priceAn 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 MatchesClean priceClean priceBond price excluding accrued interest. Price uncertaintyPrice uncertaintyChance that the future price of an asset will change. Bargain purchase price optionBargain purchase price optionGives the lessee the option to purchase the asset at a price below fair market value when the lease expires. Shadow priceShadow priceThe 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 priceTarget priceIn 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 SuggestionsImplicit price deflatorConstant 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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