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Pricing efficiency |
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Definition of Pricing efficiencyPricing efficiencyAlso called external efficiency, a market characteristic where prices at all times fully
Related Terms:External efficiencyRelated: pricing efficiency. Semi-strong form efficiencyA form of pricing efficiency where the price of the security fully reflects all Strong-form efficiencypricing efficiency, where the price of a, security reflects all information, whether or Weak form efficiencyA form of pricing efficiency where the price of the security reflects the past price and Administrative pricing rulesIRS rules used to allocate income on export sales to a foreign sales corporation. Arbitrage Pricing Theory (APT)An alternative model to the capital asset pricing model developed by Arbitrage-free option-pricing modelsYield curve option-pricing models. Asset pricing modelA model for determining the required rate of return on an asset. Asset pricing modelA model, such as the Capital Asset pricing Model (CAPM), that determines the required Binomial option pricing modelAn option pricing model in which the underlying asset can take on only two Black-Scholes option-pricing modelA model for pricing call options based on arbitrage arguments that uses Capital asset pricing model (CAPM)An economic theory that describes the relationship between risk and Capital market efficiencyReflects the relative amount of wealth wasted in making transactions. An efficient EfficiencyReflects the amount of wasted energy. Garmen-Kohlhagen option pricing modelA widely used model for pricing foreign currency options. Informational efficiencyThe speed and accuracy with which prices reflect new information. Marketplace price efficiencyThe degree to which the prices of assets reflect the available marketplace Regulatory pricing riskRisk that arises when regulators restrict the premium rates that insurance companies Two-state option pricing modelAn option pricing model in which the underlying asset can take on only two UnderpricingIssue of securities below their market value. Yield curve option-pricing modelsModels that can incorporate different volatility assumptions along the Cost-plus pricingA method of pricing in which a mark-up is added to the total product/service cost. Target rate of return pricingA method of pricing that estimates the desired return on investment to be achieved from the Capital Asset Pricing Model (CAPM)A model for estimating equilibrium rates of return and values of dual pricing arrangementa transfer pricing system that allows efficiencya measure of the degree to which tasks were performed labor efficiency variancethe number of hours actually worked minus the standard hours allowed for the production manufacturing cycle efficiency (MCE)a ratio resulting from dividing the actual production time by total lead time; overhead efficiency variancethe difference between total budgeted overhead at actual hours and total budgeted variable overhead efficiency variancethe difference between budgeted variable overhead based on actual input activity and variable overhead applied to production Labor efficiency varianceThe difference between the amount of time that was budgeted capital asset pricing model (CAPM)Theory of the relationship between risk and return which states that the expected risk semi-strong-form efficiencyMarket prices reflect all publicly available information. strong-form efficiencyMarket prices rapidly reflect all information that could in principle be used to determine true value. underpricingIssuing securities at an offering price set below the true value of the security. weak-form efficiencyMarket prices rapidly reflect all information contained in the history of past prices. EfficiencyThe ability to produce the things most wanted at the least cost. Efficiency WageWage that maximizes profits. Market EfficiencySee efficiency.
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