Rational pricing is the assumption in financial economics that asset prices (and hence asset pricing models) will reflect the arbitrage-free price of the asset as any deviation from this price will be "arbitraged away". This assumption is useful in pricing fixed income securities, particularly bonds, and is fundamental to the pricing of derivative instruments.
Read more about Rational Pricing: Arbitrage Mechanics, Fixed Income Securities, Pricing Derivatives, Pricing Shares
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“Every rational creature has all nature for his dowry and estate. It is his, if he will. He may divest himself of it; he may creep into a corner, and abdicate his kingdom, as most men do, but he is entitled to the world by his constitution.”
—Ralph Waldo Emerson (1803–1882)