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How can a bursting of an asset-price bubble in the stock market help trigger a financial crisis?

Because... economics.


How is the fair market value determined for a specific item or asset?

The fair market value of a specific item or asset is determined by considering factors such as the item's condition, demand, comparable sales, and other market conditions. This value represents the price that a willing buyer and seller would agree upon in a fair and open market transaction.


What is the difference between spot price and market price?

The spot price is the current price at which a commodity or asset can be bought or sold for immediate delivery, while the market price is the price at which a commodity or asset is currently trading in the market.


Can you explain how a futures contract works in the financial market?

A futures contract is an agreement to buy or sell an asset at a set price on a future date. It allows investors to speculate on the price movement of the asset. Traders can profit if the asset's price moves in their favor, but they can also incur losses if the price moves against them.


Do financial statements show the market value of an asset?

In general, financial statements show the book value of an asset, not the market value. The few instances where the financial statements will show market valuations are as follows: * When derivatives are carried for hedge purposes, they are periodically marked-to-market * When an investment appears to materially have lost value (when comparing to similar instruments in the market or, for illiquid markets, when operating cash flows from an investment go down markedly), conservatism requires the asset value to be moved to the "market" or lower price


How do you determine the strike price for options?

The strike price for options is determined based on factors such as the current market price of the underlying asset, the volatility of the asset, and the time until the option expires. Traders and investors analyze these factors to choose a strike price that they believe will be profitable if the option is exercised.


What is current price?

The term "current price" typically refers to the most recent market price at which an asset, stock, commodity, or currency is trading. This price can fluctuate frequently due to supply and demand dynamics, market sentiment, and economic factors. For the exact current price of a specific asset, it's best to refer to a financial news website or trading platform.


What is market price determined by?

the market or market forces


How do you price an asset which is not currently traded on the market?

estimating the price with the season


What is risk asset?

price,market risk, intrest rist...


What is the difference between options that are at the money and options that are in the money?

Options that are "at the money" have a strike price that is equal to the current market price of the underlying asset, while options that are "in the money" have a strike price that is below the current market price of the underlying asset.


What is the par value of an asset?

The par value of an asset is the price that was paid for it or the stated price, without consideration of markets pressures.For example, the par value of a US Treasury Bond set at $100,000 and paying 5% interest has a par value of $100,000. The market value may be higher or lower depending on financial market conditions.