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 Letter Of Comment:
- Examples A communication to the firm from the SEC that suggests changes to its registration statement law of one price definition.
- Definition Lombard Rate:
- Examples international equities. Interest rate the German Bundesbank uses as an upper limit to the day-to-day money rate, since no bank will pay higher rates in the money market than it has to pay for very law of one price explain.
- Definition Lemon:
- Examples An investment with poor results law of one price what is.
- Definition Lock In:
- Examples individual transacts all his or her business with a sole broker by providing superior services, such as accommodating block buy and sell needs or preparing excellent research (soft-dollar lock). This law of one price meaning.
- Definition Lock:
- Examples of general equities. Make a market both ways (bid and offer) either on the bid, offering, or an in-between price only. Locking on the offering occurs to attract a seller, since the trader is willing law of one price abbreviation.
