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Topical Terminology > Law Of One Price



2 Definitions

Law Of One Price

For Law Of One Price we have terms and definitions in 2 topics. The topics are Finance and International Economics.



Law Of One Price (Finance)

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.


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Law Of One Price (International Economics)

The principle that identical goods should sell for the same price throughout the world if trade were free and frictionless.




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