Constant
1. Financial maths - statistics - universal constants.
A universal constant is a value observed in nature, that forms part of a mathematical or statistical relationship.
Examples include the exponential constant - e - approximately 2.718282.
2. Financial maths - analysis - modelling - inputs.
More broadly, any amount that is assumed to be unchanged, for the purpose of producing a simplified model.
For example, the dividend valuation model assumes a constant rate of dividend growth - "g" - from Time 1 onward.
Contrasted with a variable.
Making this assumption in error is a common source of analysis and modelling errors.
This assumption is sometimes known as the ceteris paribus assumption.
3. Measurement - money market funds.
Any basis of measurement in which an amount is targeted - or held - at a fixed level.
For example, the constant currency exchange rate basis of comparing financial results in successive periods.
Another example is the constant net asset value basis of maintaining a money market fund.
4. Continuity - near-continuity.
Examples include constant trading, and constant dialogue between interested parties.
