Home > Term: law of one price
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.
- Part of Speech: noun
- Industry/Domain: Financial services
- Category: General Finance
- Company: Bloomberg
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- Jessehe
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