An economic rule which states that in an efficient market, a security must have...
Two portfolios that will produce exactly the same cash flows in the future must have the same value now.... more on: Law of one price
The assumption that the price of a commodity differs between any two levels of the marketing channel by no more than the transfer costs. For example, by this law, the price is expected to differ between any two locations by no more than transportation costs. Implicit in this law is the assumption of extreme specialization and perfect substitution between domestic and foreign commodities.
An economic rule stating that a given security must have the same price no matter how the security is created. If the payoff of a security can be synthetically created by a package of other securities, the implication is that the price of the package and the price of the security whose payoff it replicates must be equal. If it is unequal, an arbitrage opportunity would present itself.
Economic law that states that if the payoff of a given security can be created synthetically by combining a number of other securities, than the price of the two products (the security and the combination of securities) must have the same price, otherwise it is an arbitrage opportunity.
identical items sell for the same price in different markets
A law stating that the forces of competition will ensure that any given commodity will be sold at the same price; otherwise it will pay someone to buy where it is cheaper (thereby tending to raise price in that market) and sell where it is dearer (thereby tending to lower price in that market). The process ends only when the price is equalised in all markets. Allowance must, of course, be made for transport and transaction costs.
An economic rule stating that a given security must have the same price regardless of the means by which one goes about creating that security. This implies that if the payoff of a security can be synthetically created by a package of other securities, the price of the package and the price of the security whose payoff it replicates must be equal. If it is unequal, an arbitrage opportunity would present itself.
The law of one price is an economic law stated as: "In an efficient market all identical goods must have only one price."
