Theoretical value

Definition:

Applies to derivative products. Mathematically determined value of a derivative instrument as dictated by a pricing model such as the Black-Scholes model.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Equalizing dividend

Special dividends received by investors of a firm for income the investor lost because the firm altered the dividends payment schedule.

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