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Rules-versus-Discretion Debate |
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Definition of Rules-versus-Discretion DebateRules-versus-Discretion DebateArgument about whether policy authorities should be allowed to undertake discretionary policy action as they see fit or should be replaced by robots programmed to set policy by following specific formulas. See discretionary policy, policy rule.
Related Terms:Administrative pricing rulesIRS rules used to allocate income on export sales to a foreign sales corporation. Attribution RulesLegislation under which interest, dividends, or capital gains earned on assets you transfer to your spouse will be treated as your own for tax purposes. Interest or dividends relating to property transferred to children under 18 also will be attributed back to you. The exception to this rule is that capital gains relating to property transferred to children under 18 will not be attributed back to you. Delivery versus paymentA transaction in which the buyer's payment for securities is due at the time of Discretionary accountAccounts over which an individual or organization, other than the person in whose Discretionary cash flowCash flow that is available after the funding of all positive NPV capital investment discretionary costa cost that is periodically reviewed by a Discretionary PolicyA policy that is a conscious, considered response to each situation as it arises. Contrast with policy rule. Tick-test rulesSEC-imposed restrictions on when a short sale may be executed, intended to prevent investors administrative departmentan organizational unit that performs management activities benefiting the entire organization; Arbitrage-free option-pricing modelsYield curve option-pricing models. Arbitrage Pricing Theory (APT)An alternative model to the capital asset pricing model developed by 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 Asset Pricing Model (CAPM)A model for estimating equilibrium rates of return and values of capital asset pricing model (CAPM)Theory of the relationship between risk and return which states that the expected risk Cost-plus pricingA method of pricing in which a mark-up is added to the total product/service cost. dual pricing arrangementa transfer pricing system that allows Garmen-Kohlhagen option pricing modelA widely used model for pricing foreign currency options. GENERAL-AND-ADMINISTRATIVE EXPENSESWhat was spent to run the non-sales and non-manufacturing part of a company, such as office salaries and interest paid on loans. Performance attribution analysisThe decomposition of a money manager's performance results to explain Pricing efficiencyAlso called external efficiency, a market characteristic where prices at all times fully Regulatory pricing riskRisk that arises when regulators restrict the premium rates that insurance companies Target rate of return pricingA method of pricing that estimates the desired return on investment to be achieved from the 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. underpricingIssuing securities at an offering price set below the true value of the security. Yield curve option-pricing modelsModels that can incorporate different volatility assumptions along the
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