What Is the Law of One Price?

Published: 09 May 2024
on channel: Simple Explain
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The law of one price states that the price of an identical asset or commodity will have the same price globally, regardless of location, when certain factors are considered. It's the foundation of purchasing power parity and can be illustrated through examples of arbitrage opportunities. However, violations of this concept can occur due to various real-world factors, leading to different prices for the same goods or assets in different markets.
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