Marking to model values a position using a valuation model rather than an observed price, which is unavoidable for illiquid instruments. It creates discretion, and discretion over one's own reported profit is a standing conflict of interest.
history and doctrine · updated 2026-09-08
See also
Mark to market— Marking to market is valuing a position at current market prices. Because it converts a price into reported profit, collateral and…
Net asset value— Net asset value is the per-share value of a fund's holdings. For funds holding illiquid or stale-priced assets, the inputs to net …