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6 Cards in this Set
- Front
- Back
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Competitive market |
A market in which a good can be bought and sold at the same price |
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Law of one price |
In competitive markets, securities with the same cash flows must have the same price. |
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Arbitrage |
The practice of buying and selling equivalent goods to take advantage of a price difference |
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Arbitrage opportunity |
Any situation in which it is possible to make a profit without taking any risk or making any investment |
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Time value of money |
The difference in value between money received today and money received in the future; also, the observation that two cash flows at two different points in time have different values |
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Interest rate |
The rate at which money can be borrowed or lent over a given period |
