Rational pricing is the assumption in financial economics that asset prices – and hence asset pricing models – will reflect the arbitrage-free price of...

either general equilibrium asset pricing or rational asset pricing, the latter corresponding to risk neutral pricing. Investment theory, which is near...

Psychological pricing (also price ending, charm pricing) is a pricing and marketing strategy based on the theory that certain prices have a psychological...

The forward price (or sometimes forward rate) is the agreed upon price of an asset in a forward contract. Using the rational pricing assumption, for a...

present value terms. For an arbitrage proof of why this is the case, see Rational pricing below. For an asset that pays known income, the relationship becomes:...

martingale measure. Arbitrage pricing theory Asset pricing Financial economics § Arbitrage-free pricing and equilibrium Rational pricing Sources Varian, Hal R...

payable on the purchase price. Any other cost price would yield an arbitrage opportunity and riskless profit (see rational pricing for the arbitrage mechanics)...

The Brownian model of financial markets Rational pricing assumptions Risk neutral valuation Arbitrage-free pricing Valuation adjustments Credit valuation...

arbitrage pricing theory (APT) is a multi-factor model for asset pricing which relates various macro-economic (systematic) risk variables to the pricing of financial...

economics models. Rational pricing is the assumption that asset prices (and hence asset pricing models) will reflect the arbitrage-free price of the asset...

single, equal price per homogeneous good in all locations.[additional citation(s) needed] For further discussion, see Rational pricing. Commodities can...

logic see section "risk neutral valuation" under Rational pricing as well as section "Derivatives pricing: the Q world" under Mathematical finance; for details...

#Asset pricing theory above) Equilibrium price market efficiency economic equilibrium rational expectations Arbitrage-free price Rational pricing § Arbitrage...

Binomial options pricing model; Trinomial tree Monte Carlo methods for option pricing Finite difference methods for option pricing More recently, the...

notion of a replicating portfolio is fundamental to rational pricing, which assumes that market prices are arbitrage-free – concretely, arbitrage opportunities...

neutral valuation. Here the price of the option is its discounted expected value; see risk neutrality and rational pricing. The technique applied then...

will then quickly reprice to its correct level. Here, we apply the rational pricing logic relating to "Assets with identical cash flows". In detail: (1)...

XVA exposures. Historically, (OTC) derivative pricing has relied on the Black–Scholes risk neutral pricing framework which assumes that funding is available...

Code ClearCase Rational DOORS Rational Performance Tester Rational Rhapsody Rational Rose Rational Software Modeler Rational Synergy Rational Unified Process...

The concept of rational expectations was first introduced by John F. Muth in his paper "Rational Expectations and the Theory of Price Movements" published...

Post-autistic economics Rational agent Rational choice theory Rational pricing Superrationality Bounded rationality Rationality and power List of alternative...

Quantity theory of money Rate of return pricing – Rational choice theory – Rational expectations – Rational pricing – Reaganomics – Real business-cycle theory...

terms of bond prices, or as a portfolio of forward contracts. The fact that these methods agree, underscores the fact that rational pricing will apply between...

price index, producer price index, and GDP deflator. price level price point price–specie flow mechanism price war pricing pricing science The application...

Rational choice theory refers to a set of guidelines that help understand economic and social behaviour. The theory originated in the eighteenth century...

(b) Arbitrage arguments then allow for the option's price to be estimated today; see Rational pricing § Delta hedging. (c) When hedging of this sort is...

arguments ("rational pricing") apply when the deliverable asset exists in plentiful supply or may be freely created. Here, the forward price represents...

consistent with the selected prices; see Rational pricing § Fixed income securities and Bond valuation § Arbitrage-free pricing approach. Note that some analysts...

more complex derivatives, pricing involves developing a complex pricing model: understanding the stochastic process of the price of the underlying asset...

a more accurate price can be obtained than if the price is calculated with a present-value pricing approach. Arbitrage-free pricing is used for bond...