Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Value of asset

The price of an asset is set by supply and demand on the market. The value of an asset can be seen as a potential market value or price of the asset. Usually the value is calcalated from discounting future cash flows from owning asset, back to the present time. The value of an asset should be consistent with the value of other related assets to avoid arbitrage. Under some simplifying assumptions one derive what is called the risk neutral valuation formula.

 

Questions: Magnus Wiktorsson
Last update: 2011 Apr 01 12:09:36. Validate: HTML CSS

Top of page
Centre for Mathematical Sciences, Box 118, SE-22100, Lund. Telefon: +46 46-222 00 00 (vx)