theoretical value

Definition

In options pricing, the hypothetical value of an option as calculated by the Black-Scholes Option Pricing Model.

Use theoretical value in a sentence

You should always try and know what the theoretical value of any investment will be and decide if it is worth your resources.

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The theoretical value was high and I hoped that it was accurate because, if that was the case, everything would work out fine.

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He knew that the theoretical value of the stock was rather high and he was very eager to make an investment in such a promising venture.

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