Glossary BG Image

Glossary of Stock Market Terms

Browse Terms By Number or Letter:
Financial Terms By: f
Fair value

In the context of futures, the equilibrium price for futures contracts. Also called the theoretical futures price, which equals the spot price continuously compounded at the cost of carry rate for some time interval. More generally, fair value for any asset simply refers to the perception that it is neither underpriced (too cheap) nor overpriced (too expensive).

Copyright © 2018, Campbell R. Harvey. All Worldwide Rights Reserved. Do not reproduce without explicit permission.