Mark to Model

To price a position or portfolio at prices determined by using a financial model to interpolate between or among the market prices readily available. A mark to model is less reliable than a mark to market, because it depends on the realism of the assumptions in the model and may attribute a degree of liquidity to the instruments being priced that may not be present. With many complex financial instruments, where no ready market is available, a mark to model is the only practical valuation technique.

© Copyright 1996, 1999 Gary L.Gastineau. First Edition.
© 1992 Swiss Bank Corporation.