# kaal:claim:1428387-013

**Claim.** Valuing thinly traded assets with exchange quotes is unsound because the price for less frequently traded assets may not indicate fair market value at the time of valuation, yet nearly a quarter of surveyed funds relied exclusively on such quotes.

**Type.** failure  **Support.** evidenced

**Holds when.**

- thinly traded or infrequently traded assets

**Source quote.**

> Using exchange quotes is problematic if applied to thinly traded assets, as the price for less frequently traded assets may not be indicative of fair market value at the time of valuation,46 and nearly a quarter of survey participants relied exclusively on these quotes to value assets.

**From.** Kaal, *Hedge Fund Valuation Retailization, Regulation, and Investor Suitability* (2009), II.D Sophistication of Financial Instruments, page 12

**Cite as.** Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428387

**Verify.** sha256 of source PDF `6aa3a280dc6750723be2389f3af2aabf3a16c4ce20e49fcdaddd7f2ea95a67aa` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202009%20-%20Hedge%20Fund%20Valuation%20Retailization%2C%20Regulation%2C%20and%20Investor%20Suitability.pdf

**Failure mode.** stale-quote-valuation  (family: valuation-and-pricing-failure)

**Topics.** defi, economics, empirical-evidence

**Keywords.** exchange-quotes, stale-prices, thinly-traded-assets, survey-evidence

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.