Getting Good Closing Prices In Thinly Traded Securities: Junk Bond Lag Sparks Doubts


How do institutional investors obtain accurate closing prices for thinly traded securities? What normally is an interesting question became a bit more compelling after the Wall Street Journal reported Oct. 15 that net asset values (NAVs) for high-yield bond funds did not immediately reflect a Columbus Day rout in the market for below-investment grade or "junk" bonds.

On Oct. 12, banks and the U.S. Treasury market was closed in observance of Columbus Day, but corporate bonds--including junk b