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Fair Value
Fair Value
Image 1 The estimated value of all assets and liabilities of an acquired company used to consolidate the financial statements of both companies.

In the futures market, fair value is the equilibrium price for a futures contract. This is equal to the spot price after taking into account compounded interest over a certain period of time.

Image 2 The "fair value" quoted on TV refers to the relationship between the futures contract on a market index and the actual value of the index. If the futures are above fair value then traders are betting the market index will go higher, the opposite is true if futures are below fair value.


Annual Report


Acquisition

Assets

Compounding

Consolidate

Futures

Index

Liability

Spot Price