|
 |
Investing Glossary:
Law of one price
Copyright 2009,
Campbell R. Harvey. All Rights Reserved.
Do not reproduce without explicit permission.
- L -
| Term: |
|
| Definition: |
| 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.
|
|
|
| |
|
