Asset Price

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Asset Price

The amount one pays for an asset when buying it. The price represents the amount of value the market has assigned, fairly or unfairly, to an asset. Normally, prices are expressed in terms of money, but this is not always the case; for example, one may trade four chickens for two sheep.

Asset prices tend to be regulated by the law of supply and demand; that is, the price of an asset increases with smaller supply and/or greater demand. A corollary to this is the idea that commoditization drives prices down because it increases supply (sometimes vastly) while leaving demand the same. Prices likewise rise when the value of money declines. Governments can and have controlled the prices of certain assets by subsidy or decree. This is usually an anti-inflationary measure and tends to distort, rather than eliminate, the law of supply and demand. It is thus not generally sustainable as a mechanism for controlling price.
References in periodicals archive ?
The NBER's Program on Asset Pricing met at Stanford University on November 20-21, 2014.
After providing a bit of empirical motivation via a brief look at data from Japan's stock and land price boom and bust of 1985-91, we study implications of the central model of traditional asset pricing, in which price is simply expected discounted future dividends.
The 12 essays in 2B review advances in consumption-based asset pricing, bond pricing, the risk behind hedge fund strategies, credit derivatives, measuring investment performance and market risk, and understanding the behavior of individual investors.
Recognizing the role of extrapolative expectations in asset pricing will make monetary and macroprudential policy both more robust and more complex.
Beginning with the 2006 price setting, the Board will use only a capital asset pricing model (CAPM) to determine a return on equity (ROE) that reflects the return earned by private-sector service providers.
Standard theories of asset pricing assume that investors purchase assets with their own wealth.
Editorial covers such areas as accounting/finance, asset pricing, banking/finance, capital markets/finance, computational finance, corporate finance, derivatives, portfolio analysis, regulation, systemic risk and stock market analysis, among others.
Because of the shortage of both debt and equity capital for real estate assets during this time, our acquisition strategy benefitted from asset pricing discrepancies and capital inefficiencies.
Asset pricing models like Capital Asset pricing model, Arbitrage Pricing theory, Option pricing models have been developed to understand the pricing techniques used in the markets.
Lu Zhang is a Research Associate in the NBER's Program on Asset Pricing and the Dean's Distinguished Chair in Finance and Professor of Finance at The Ohio State University.
In sections on foundations, discrete-time modeling, and continuous-time modeling, he considers such topics as portfolio risk management, dynamic choice for recursive investors, and a general theory of equilibrium asset pricing.
LONDON -- StatPro Group plc (AIM:SOG), the AIM listed provider of portfolio analytics, market data and asset pricing services for the global asset management industry, today provides a trading update for the nine months ended 30 September 2009.