Definition: Price Discovery - Examples & Advice | Bolder Money

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Definition

The process by which the market determines the price of an asset based on supply and demand dynamics.

What to consider

Watch how market forces determine asset prices.
Consider the effects of supply and demand on pricing.
Use it as one tool to make informed buying or selling decisions.

Real world scenarios

At a local auction, Daniel witnessed the process of price discovery as bidders competed, eventually determining the fair market value of the rare painting.

Related terms

Investments & Retirement

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