Valuations data are generally end-of-day and used for accounting operations. They are typically provided for which instruments?

• A. Equities with high trading activity
• B. Fixed income instruments that do not actively trade
• C. Derivatives with intraday liquidity
• D. Commodities futures

Answer: (B)

End-of-day valuations are used for accounting because they provide a single, auditable price to record positions and compute daily P&L when a market doesn’t offer reliable prices throughout the trading day. Fixed income instruments that do not actively trade fit this approach well: bonds and similar securities can be illiquid, with prices that don’t move in real time and may rely on models, yield curves, and spreads rather than continuous quotes. A daily valuation gives a consistent NAV or book value for financial reporting, without the noise of intraday price fluctuations that may not reflect fair value for infrequently traded bonds. In contrast, assets with high trading activity, active derivatives markets, or daily settlement prices (like many equities, intraday-liquidity derivatives, or widely traded commodities futures) benefit from ongoing, intraday or real-time valuations to capture current market value for risk and performance reporting.