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e. In economics, nominal value refers to value measured in terms of absolute money amounts, whereas real value is considered and measured against the actual goods or services for which it can be exchanged at a given time. Real value takes into account inflation and the value of an asset in relation to its purchasing power.
Thus, price negotiations, trading circumstances and the time factor may change actual prices realized from the prices originally set, and if price inflation occurs there is in addition a difference between the nominal prices and the inflation-adjusted price. The price of a stock or a debt security, expressed in a given currency, may be highly ...
The law of one price (LOOP) states that in the absence of trade frictions (such as transport costs and tariffs), and under conditions of free competition and price flexibility (where no individual sellers or buyers have power to manipulate prices and prices can freely adjust), identical goods sold at different locations should be sold for the same price when prices are expressed in a common ...
In economics, the long-run is a theoretical concept in which all markets are in equilibrium, and all prices and quantities have fully adjusted and are in equilibrium. The long-run contrasts with the short-run, in which there are some constraints and markets are not fully in equilibrium. More specifically, in microeconomics there are no fixed ...
Net asset value. Net asset value ( NAV) is the value of an entity's assets minus the value of its liabilities, often in relation to open-end, mutual funds, hedge funds, and venture capital funds. [ 1][ 2] Shares of such funds registered with the U.S. Securities and Exchange Commission are usually bought and redeemed at their net asset value. [ 3]
Real gross domestic product ( real GDP) is a macroeconomic measure of the value of economic output adjusted for price changes (i.e. inflation or deflation ). [ 1] This adjustment transforms the money-value measure, nominal GDP, into an index for quantity of total output. Although GDP is total output, it is primarily useful because it closely ...
Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated by dividing the company's market capitalization by the revenue in the most recent year; or, equivalently, divide the per-share price by the per-share revenue. The justified P/S ratio is calculated as the price-to-sales ratio based on the Gordon Growth Model.
Accounting. In accounting, fair value is a rational and unbiased estimate of the potential market price of a good, service, or asset. The derivation takes into account such objective factors as the costs associated with production or replacement, market conditions and matters of supply and demand.