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Rational pricing
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{{Short description|Assumption in financial economics}} {{Other uses|Rational (disambiguation){{!}}Rational}} {{Original research|date=June 2014}} '''Rational pricing''' is the assumption in [[financial economics]] that asset prices β and hence [[asset pricing model]]s β will reflect the [[arbitrage-free]] price of the asset as any deviation from this price will be "arbitraged away". This assumption is useful in pricing fixed income securities, particularly bonds, and is fundamental to the pricing of derivative instruments.
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