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Extrinsic Value

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Extrinsic Value
The value of an asset that occurs by mutual agreement. Fiat money, for example, has value because everyone in an economy agrees that it has value, even though the paper on which it is printed does not have any more value than other paper. The line between extrinsic and intrinsic value is sometimes blurry.


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This premium is known as the extrinsic value in options trading and is what you pay the person who sold you the contract for the risk that person take.
Intrinsic value stems from internal, personal factors such as interests and enjoyment or curiosity, whereas extrinsic value is directed by observable external factors such as rewards, punishment, or peer/parents pressures (Deci & Ryan, 1986).
When collecting fine art, make sure that the art has intrinsic as well as extrinsic value," Greg says.
 
 
 
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