Meaning 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
More terms such as Law of one price in Dictionary L.
- Definition Level-Coupon Bond:
- Examples Bond with a stream of coupon payments that remain the same throughout the life of the bond law of one price definition.
- Definition Legal Transfer:
- Examples A stock transaction that requires special documentation in addition to standard stock or bond power to be legally valid law of one price explain.
- Definition Liability:
- Examples A financial obligation, or the cash outlay that must be made at a specific time to satisfy the contractual terms of such an obligation law of one price what is.
- Definition Law Of Large Numbers:
- Examples The mean of a random sample approaches the mean (expected value) of the population as sample size increases law of one price meaning.
- Definition Limitation On Sale-And-Leaseback:
- Examples A bond covenant that restricts in some way a firm's ability to enter into sale-and-leaseback transactions, financing techniques that could affect creditor thinness law of one price abbreviation.
