About Salman Khan
Salman Khan is the Founder, Executive Director, and Faculty of the Khan Academy, whose mission is to provide a free world-class education to anyone, anywhere. He has worked for both hedge funds and Fortune 500 companies and holds an MBA from Harvard Business School, where he was the president of his class. He also attended MIT, where he received three degrees: a Masters in Electrical Engineering & Computer Science, a B.S. in Electrical Engineering & Computer Science, and a B.S. in Mathematics.More Topics Explained
About CNBC Explains
RSS Feed
Fair Value: CNBC Explains
Text Size 
Fair value is a tool used by investors to understand the relationship between the value of futures contracts and the current price of a stock. The term is used in pre-market hours to help forecast the direction of the market. Any differences are used by sophisticated investors to create arbitrage opportunities. CNBC.com displays real time pre-market indicators, such as fair value, and you can also read a text explanation of fair value for indexes, which is what is routinely mentioned on CNBC’s Squawk Box. What is fair value and how is it interpreted by investors? Salman Khan of the Khan Academy gives a detailed explanation in the videos below.
From the first video, you’ll understand:
- The technical definition of fair value
- How fair value is an indicator of what will happen after the market opens
 |
From the second video, you’ll understand:
- How investors interpret fair value
- Whether fair value can be used by average investors
 |
Data is a real-time snapshot *Data is delayed at least 15 minutes
