#indifference_price

Indifference price

In finance, indifference pricing is a method of pricing financial securities with regard to a utility function. The indifference price is also known as the reservation price or private valuation. In particular, the indifference price is the price at which an agent would have the same expected utility level by exercising a financial transaction as by not doing so. Typically the indifference price is a pricing range for a specific agent; this price range is an example of good-deal bounds.

Wed 31st

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