--%>
Assignment Help - homework help

Explain marking to market with an example

Explain marking to market with an example.

E

Expert

Verified

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.

   Related Questions in Financial Management

  • Q : Describe official reserve assets and

    Describe official reserve assets & its major components.Official reserve assets are those financial assets which can be utilized as international means of payments. At present, official reserve assets comprise: (I) gold, (ii) foreign exchang

    		•
  • Q : Major types of international bond

    In brief define each of the major types of international bond market instruments, noting their distinguishing characteristics.The major kind of international bond instruments & their distinguishing characteristics are as follows:

    		•
  • Q : Define an example to Hedge Define an

    Define an example to Hedge?

    		•
  • Q : Find QSD and set up

    Company A is a AAA-rated firm wanting to issue five-year FRNs. It determines that it can issue FRNs at six-month LIBOR + 1/8 percent or at the six-month Treasury-bill rate + ½ percent. Specified its asset structure, LIBOR is the preferred index. Comp

    		•
  • Q : Online quiz hi the link is

    hi the link is https://myelearning.cavehill.uwi.edu/login/index.php login: 411002468 pass- ls@2014 go into financial management 2 course, the quiz will be from week 1-5 lecture

    		•
  • Q : Determine value of put option with same

    Stock price is $98; and European call option struck at $100 along with an expiration of nine months has a value of $9.07. There nine-month, compounded continuously, interest rate is 4.5%. So find out the value of the put option with the same strike and expirat

    		•
  • Q : What will happen when a bank gives

    What will happen when a bank gives discount interest on a loan?

    		•
  • Q : Ratios in which long-term bond investor

    What are the ratios that a potential long-term bond investor would be most interested in?

    		•
  • Q : Leveraged buyout What is an LBO

    What is an LBO (leveraged buyout)?  Explain the risks and the potential rewards for the equity investors.

    		•
  • Q : In financial theory how financial data

    In financial theory how financial data satisfied?

    		•