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Constant dollars

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Definition of Constant dollars

Constant Dollars Image 1

Constant dollars

See real dollars.



Related Terms:

Current Dollars

A variable like GDP is measured in current dollars if each year's value is measured in prices prevailing during that year. In contrast, when measured in real or constant dollars, each year's value is measured in a base year's prices.


Constant dollar accounting

A method for restating financial statements by reducing or
increasing reported revenues and expenses by changes in the consumer price index,
thereby achieving greater comparability between accounting periods.


constant-growth dividend discount model

Version of the dividend discount model in which dividends grow at a constant rate.


Constant-growth model

Also called the Gordon-Shapiro model, an application of the dividend discount
model which assumes (1) a fixed growth rate for future dividends and (2) a single discount rate.


eurodollars

dollars held on deposit in a bank outside the United States.



Eurodollars

Deposits denominated in U.S. dollars but held in banks located outside the United States, such as in Canada or France.


Soft dollars

The value of research services that brokerage houses supply to investment managers "free of
charge" in exchange for the investment manager's business/commissions.


Constant Dollars Image 2

Fixed Exchange Rate

An exchange rate held constant by a government promise to buy or sell dollars at the fixed rate on the foreign exchange market.


Real

Measured in base year, or constant, dollars. Contrast with nominal.


Real interest rate

The rate of interest excluding the effect of inflation; that is, the rate that is earned in terms
of constant-purchasing-power dollars. Interest rate expressed in terms of real goods, i.e. nominal interest rate
adjusted for inflation.



 

 

 

 

 

 

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