Market Price

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Definition of 'Market Price'

The market price of a security is the price at which it is currently trading in the open market. It is determined by the forces of supply and demand, and can fluctuate throughout the day as investors buy and sell the security.

There are a number of factors that can affect the market price of a security, including:

* The company's financial performance
* The economic outlook
* The political climate
* The level of risk associated with the security

The market price of a security is important because it reflects the value that investors place on the security. It can also be used to compare the value of different securities.

However, it is important to remember that the market price of a security is not always an accurate reflection of its true value. There are a number of factors that can cause the market price to deviate from the intrinsic value of the security.

For example, a security may be trading at a discount if it is perceived to be riskier than other securities in its class. Conversely, a security may be trading at a premium if it is perceived to be less risky than other securities in its class.

As a result, it is important to consider a number of factors before making an investment decision, including the market price of the security, the company's financial performance, the economic outlook, and the political climate.

In addition, it is important to remember that the market price of a security can fluctuate significantly over time. This means that investors who buy a security at a high price may not be able to sell it for the same price later on.

Therefore, it is important to be aware of the risks involved before investing in any security.

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