Which financial term refers to the practice of pricing a position based on financial models rather than market prices?

The correct answer is the term that refers to pricing a position based on financial models rather than actual market prices. Mark to Model is a practice used primarily when market prices are not available or reliable, and it allows for the valuation of financial instruments based on theoretical pricing models.

This method involves using various valuation techniques, such as discounted cash flow analyses or option pricing models, to estimate the fair value of an asset or liability. It's especially relevant in situations where market activity is sparse or where certain financial instruments are illiquid.

In contrast, market valuation usually involves evaluating prices based on current market conditions, while mark to market focuses on adjusting the value of positions based on current market prices, reflecting the gains or losses immediately. Evaluated pricing typically relies on a mix of both market data and model-based approaches but is not specifically defined as pricing solely based on models, which is why Mark to Model is the most accurate term in this context.