The Law Dictionary

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CHEAP Definition & Legal Meaning

Definition & Citations:

An ASSET that is perceived by market participants to be inexpensive compared to alternatives or proxies (i.e., the SPREAD is too wide in the case of a BOND or the price to low in the case of a COMMON STOCK, currency or commodity). Those believing the asset is cheap will seek to profit by purchasing it, directly, synthetically, or through an ARBITRAGE trade. See also RICH.


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