Administrative pricing rules
IRS rules used to allocate income on export sales to a foreign sales corporation. |
Similar financial terms
Yield curve option-pricing modelsModels that can incorporate different volatility assumptions along the yield curve, such as the Black-Derman-Toy model. Also called arbitrage-free option-pricing models.
Underpricing
Issue of securities at a discount to their market value.
Two-state option pricing model
An option pricing model in which the underlying asset can take on only two possible (discrete) values in the next time period for each value it can take on in the preceding time period. Also called the binomial option pricing model.
Regulatory pricing risk
Risk that arises when regulators restrict the premium rates that insurance companies can charge.
Pricing efficiency
Also called external efficiency, a market characteristic where prices at all times fully reflect all available information that is relevant to the valuation of securities.
Binomial option pricing model
An option pricing model in which the underlying asset can take on only two possible, discrete values in the next time period for each value that it can take on in the preceding time period.
Tick-test rules
SEC-imposed restrictions on when a short sale may be executed, intended to prevent investors from destabilizing the price of a stock when the market price is falling. A short sale can be made only when either (a) the sale price of the particular stock is higher than the last trade price (referred to as an uptick trade) or (b) if there is no change in the last trade price of the particular stock, the previous trade price must be higher than the trade price that preceded it (referred to as a zero ...
