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A good's price elasticity of demand (, PED) is a measure of how sensitive the quantity demanded is to its price. When the price rises, quantity demanded falls for almost any good (law of demand), but it falls more for some than for others. The price elasticity gives the percentage change in quantity demanded when there is a one percent increase ...
When the price of an asset is considered as a function of yield, duration also measures the price sensitivity to yield, the rate of change of price with respect to yield, or the percentage change in price for a parallel shift in yields. [1] [2] [3]
A nominal value, assumed in many analyses, would be 20-30 years, analogous to long term bonds. Higher price/earnings and other multiples imply longer duration. Duration is a measure of the price sensitivity of a stock to changes in the long term interest rate, i.e., the longer the duration, the more sensitive the stock is to interest rates.
Price Sensitivity Meter (van Westendorp) The Price Sensitivity Meter (PSM) is a market technique for determining consumer price preferences. It was introduced in 1976 by Dutch economist Peter van Westendorp. The technique has been used by a wide variety of researchers in the market research industry. It historically has been promoted by many ...
Price-sensitive customers do a lot of price comparison, drive hard bargains, and impact the profitability of retailers negatively. Companies like Libbey , How These Companies Profit From Varying ...
Price elasticity of demand measures sensitivity of demand to price. Thus, it measures the percentage change in demand in response to a change in price. [ 11 ] More precisely, it gives the percentage change in quantity demanded in response to a one per cent change in price ( ceteris paribus , i.e. holding constant all the other determinants of ...
Bond convexity is a measure of the sensitivity of the duration to changes in interest rates, the second derivative of the price of the bond with respect to interest rates (duration is the first derivative); it is then analogous to gamma. In general, the higher the convexity, the more sensitive the bond price is to the change in interest rates.
The more curved the price function of the bond is, the more inaccurate duration is as a measure of the interest rate sensitivity. [2] Convexity is a measure of the curvature or 2nd derivative of how the price of a bond varies with interest rate, i.e. how the duration of a bond changes as the interest rate changes. [3]