Explain marking to market with an example
Explain marking to market with an example.
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A stock is trading at $47, but you think this is seriously undervalued. You believe that the value must be $60. You buy that stock. How much do you say to people your little ‘portfolio’ is worth as $47 or $60? When you say $47 then you marking to market, when you say $60 you are marking to model or your model. Of course this is open to serious abuse and therefore it is usual, and frequently a regulatory need, to quote the mark-to-market value. When you are right about the stock value so then the profit will be realized like the stock price rises.
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In integrated world financial market, a financial crisis in a country can be quickly transmitted to other countries, causing global crisis. What sort of measures would you suggest to stop the recurrence of Asia-type crisis? Discover Q & A Leading Solution Library Avail More Than 1461264 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads No hassle, Instant Access Start Discovering 18,76,764 1934101 Asked 3,689 Active Tutors 1461264 Questions Answered Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! Submit Assignment
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