New Delhi, May 8 -- Mark to market is a financial metric that calculates the true value of a company's assets and liabilities, which fluctuates over time. One of the major objectives of mark to market is to measure and evaluate the financial condition of a company based on existing market factors.

This approach gives the latest update of the financial worth of an asset, similar to checking the value of an investment portfolio at any point in time. Typically, mutual funds and stocks are marked to market daily. It is also used for futures trading.

One of the major risks associated with mark to market is the volatility of the market. The consistent rise and fall in the market often make it difficult to determine the true value of an asset,...