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Mark to Market
(redirected from Mark-to-model)

    Also found in: Acronyms, Wikipedia 0.01 sec.
Mark to Market
To record a change in the value of an asset or fund to reflect its current fair market value. Marking to market occurs on a daily basis and is used for a number of purposes. Notably, investors mark to market a portfolio or security to ensure that a margin account is meeting its minimum maintenance.
Mark to Market (MTM)

What Does Mark to Market (MTM) Mean?

(1) The act of recording and/or updating the price or value of a security, portfolio, or account to reflect its current market value rather than its book value. (2) In mutual funds, an MTM is when the net asset value (NAV) of the fund is based on the most current market values.

Investopedia explains Mark to Market (MTM)

(1) This often is done in the future's market to help ensure that margin requirements are met. If the current market value causes the margin account to fall below its required level, the trader will be faced with a margin call. (2) Mutual funds are marked to market on a daily basis at the market close so that investors have an idea of a fund's NAV.

Related Terms:
• Book Value
• Maintenance Margin
• Margin Call
• Market Value
• Net Asset Value—NAV
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It creates scope for manipulating type-three assets--recent events showed how complex securities such as sub-prime bonds and collateralised debt obligations could be valued at mark-to-model instead of MTM values and that audit firms could be fooled by these manipulations.
Aversion therapy: Sundarraju Srinath explains why preventive measures ... by Srinath, Sundarraju / Financial Management (UK)
Almost always, the mark-to-model number is quite a bit higher than the mark-to-market number, the number that is associated with the last trade.
Economicoutlook by Maley, Frank / Business North Carolina
If servicing sale activity picks up appreciably, as the servicing brokers seem to indicate, it will be interesting to see how such benchmarking and mark-to-model approaches to fair value are impacted, especially in light of the impending Fair Value Measurement guidance requirements.
Accounting for mortgage servicing: revolution or evolution? by White, Brenda B.; Forrester, Timothy J. / Mortgage Banking
 
 
 
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