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Financial Terms | |
Prices |
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Definition of PricesPricesPrice of a share of common stock on the date shown. Highs and lows are based on the highest and
Related Terms:Market pricesThe amount of money that a willing buyer pays to acquire something from a willing seller, SPECIFIC INVOICE PRICESAn inventory valuation method in which a company values the items in its ending inventory based ActuaryOne who uses statistical information to evaluate the probability of future events and prices insurance products. Agency basisA means of compensating the broker of a program trade solely on the basis of commission American Depositary Receipts (ADRs)Certificates issued by a U.S. depositary bank, representing foreign ArbitrageThe simultaneous buying and selling of a security at two different prices in two different markets, ArbitrageTransactions designed to make a sure profit from inconsistent prices. ![]() AverageAn arithmetic mean of selected stocks intended to represent the behavior of the market or some Back-up1) When bond yields and prices fall, the market is said to back-up. BackwardationA market condition in which futures prices are lower in the distant delivery months than in BearAn investor who believes a stock or the overall market will decline. A bear market is a prolonged period Bear marketAny market in which prices are in a declining trend. bear marketA market in which stock or bond prices are generally Bear MarketA prolonged period of falling stock market prices. Bear raidA situation in which large traders sell positions with the intention of driving prices down. Bid-askedspread The difference between the bid and asked prices. ![]() Binomial modelA method of pricing options or other equity derivatives in Bond pointsA conventional unit of measure for bond prices set at $10 and equivalent to 1% of the $100 face Bubble theorySecurity prices sometimes move wildly above their true values. Bull marketAny market in which prices are in an upward trend. bull marketA market in which stock or bond prices are generally rising. Bull MarketA prolonged period of rising stock market prices. charge-back systema system using transfer prices; see transfer Closing rangeAlso known as the range. The high and low prices, or bids and offers, recorded during the confrontation strategyan organizational strategy in which company management decides to confront, rather than avoid, competition; an organizational strategy in which company management still attempts to differentiate company Consumer Price Index (CPI)The CPI, as it is called, measures the prices of consumer goods and services and is a ContangoA market condition in which futures prices are higher in the distant delivery months. ![]() Current DollarsA 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. Dollar bondsMunicipal revenue bonds for which quotes are given in dollar prices. Not to be confused with dumpingselling products abroad at lower prices than those Earnings surprisesPositive or negative differences from the consensus forecast of earnings by institutions Efficient capital marketA market in which new information is very quickly reflected accurately in share efficient capital marketsFinancial markets in which security prices rapidly reflect all relevant information about asset values. Efficient Market HypothesisIn general the hypothesis states that all relevant information is fully and Event studyA statistical study that examines how the release of information affects prices at a particular time. Flexible budgetA method of budgetary control that flexes, i.e. adjusts the original budget by applying standard Foreign exchange dealerA firm or individual that buys foreign exchange from one party and then sells it to Index arbitrageAn investment/trading strategy that exploits divergences between actual and theoretical InflationThe rate at which the general level of prices for goods and services is rising. inflationRate at which prices as a whole are increasing. Informational efficiencyThe speed and accuracy with which prices reflect new information. Ito processStatistical assumptions about the behavior of security prices. For J-curveTheory that says a country's trade deficit will initially worsen after its currency depreciates because law of one priceTheory that prices of goods in all countries should be equal when translated to a common currency. Liquidation ValueThe net proceeds (after taxes and expenses) of selling the assets Make a marketA dealer is said to make a market when he quotes bid and offered prices at which he stands Management accountingThe production of financial and non-financial information used in planning for the future; making decisions about products, services, prices and what costs to incur; and ensuring that plans are implemented and achieved. mark to marketRefers to the accounting method that records increases Market MechanismThe system whereby using prices, the interaction of supply and demand allocates inputs and distributes outputs. Marketplace price efficiencyThe degree to which the prices of assets reflect the available marketplace markupthe period after an announcement of a takeover bid in which stock prices typically rise until a merger or acquisition is made (or until it falls through). material yield variance(standard mix X actual quantity X standard price) - (standard mix X standard quantity X standard price); Menu CostsThe costs to firms of changing their prices. Moving averageUsed in charts and technical analysis, the average of security or commodity prices Moving averageA price average that is adjusted by adding other Moving-averages chartA financial chart that plots leading and lagging New ClassicalsEconomists who, like classical economists, believe that wages and prices are sufficiently flexible to solve the unemployment problem without help from government policy. New KeynesiansEconomists who, like Keynes, believe that for good reason wages and prices are sticky and so prolong recessions, suggesting a need for government policy. One man pictureThe picture quoted by a broker is said to be a one-man picture if both the bid and offered OPECOrganization of Petroleum Exporting Countries, a group of oil exporters that brought about the dramatic increases in oil prices during the 1970s. Open-market purchase operationA systematic program of repurchasing shares of stock in market Open positionA net long or short position whose value will change with a change in prices. Opening priceThe range of prices at which the first bids and offers were made or first transactions were Overbought/oversold indicatorAn indicator that attempts to define when prices have moved too far and too Overreaction hypothesisThe supposition that investors overreact to unanticipated news, resulting in Path dependent optionAn option whose value depends on the sequence of prices of the underlying asset Perfectly competitive financial marketsMarkets in which no trader has the power to change the price of PictureThe bid and asked prices quoted by a broker for a given security. Posttrade benchmarksprices after the decision to trade. Pre-trade benchmarksprices occurring before or at the decision to trade. Price discovery processThe process of determining the prices of the assets in the marketplace through the Price FlexibilityEase with which prices adjust in response to excess supply or demand. Price LevelA weighted average of prices of all goods and services where the weights are given by total spending on each good or service. Measured by a price index. Price-specie-flow mechanismAdjustment mechanism under the classical gold standard whereby Price StickinessResistance of prices to change. Price takersIndividuals who respond to rates and prices by acting as though they have no influence on them. Price-volume relationshipA relationship espoused by some technical analysts that signals continuing rises Pricing efficiencyAlso called external efficiency, a market characteristic where prices at all times fully QuotationThe bid and offered prices a dealer is willing to buy or sell at. Rally (recovery)An upward movement of prices. Opposite of reaction. random walk theorySecurity prices change randomly, with no predictable trends or patterns. RangeThe high and low prices, or high and low bids and offers recorded during a specified time. ReactionA decline in prices following an advance. Opposite of rally. Real marketThe bid and offer prices at which a dealer could do "size." Quotes in the brokers market may Real timeA real time stock or bond quote is one that states a security's most recent offer to sell or bid (buy). Replacement ValueThe amount necessary to duplicate a company's assets at current revenue centera responsibility center for which a manager is accountable only for the generation of revenues and has no control over setting selling prices, or budgeting or incurring costs Sales mixThe mix of product/services offered by the business, each of which may be aimed at different customers, with each product/service having different prices and costs. Section 482United States Department of Treasury regulations governing transfer prices. semi-strong-form efficiencyMarket prices reflect all publicly available information. Settlement priceA figure determined by the closing range which is used to calculate gains and losses in Short squeezeA situation in which a lack of supply tends to force prices upward. Spot futures parity theoremDescribes the theoretically correct relationship between spot and futures prices. Spread1) The gap between bid and ask prices of a stock or other security. SpreadFor options, a combination of call or put options on the same stock standard cost carda document that summarizes the direct Stock splitOccurs when a firm issues new shares of stock but in turn lowers the current market price of its strong-form efficiencyMarket prices rapidly reflect all information that could in principle be used to determine true value. Taking a viewA London expression for forming an opinion as to where market prices are headed and acting on it. 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