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. Bloomberg Financial Dictionary
* * *law of one price UK US noun [S]► ECONOMICS the principle that in a perfect financial market goods would have the same price everywhere: »
Mobile phones reduced price differences across fish markets by almost 60% in four years, an almost-perfect example of the ""law of one price.""
Financial and business terms. 2012.
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Law of one price — The law of one price is an economic law stated as: In an efficient market all identical goods must have only one price. The intuition for this law is that all sellers will flock to the highest prevailing price, and all buyers to the lowest… … Wikipedia
Law of one price — An economic rule stating that a given security must have the same price regardless of the means by which one goes about creating that security. This implies that if the payoff of a security can be synthetically created by a package of other… … Financial and business terms
Law Of One Price — The theory that the price of a given security, commodity or asset will have the same price when exchange rates are taken into consideration. The law of one price is another way of stating the concept of purchasing power parity. The law of one… … Investment dictionary
Law of one price — Loi du prix unique En économie, la loi du prix unique (en anglais, Law of one price (LooP)) est une théorie économique stipulant que dans un marché efficient, chaque bien identique doit avoir le même prix en tout point de ce marché. Cette loi est … Wikipédia en Français
Law of one price — Jevons Gesetz von der Unterschiedslosigkeit der Preise (nach William Stanley Jevons) ist ein Gesetz der Mikroökonomie. Das Gesetz besagt, dass für ein Gut nur ein (einheitlicher) Preis gelten kann, wenn räumliche, zeitliche, sachliche und… … Deutsch Wikipedia
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price — A fixed value of something. Prices are usually expressed in monetary terms. In a free market, prices are set as a result of the interaction of supply and demand in a market; when demand for a product increases and supply remains constant, the… … Financial and business terms
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price/earnings ratio — (P/E ratio) One of the methods of measuring how highly investors value the earnings of a company. It is calculated by dividing the company s share market price by its earnings per share. Traditionally, a high price/earnings ratio suggests a… … Law dictionary