This includes a review of any internal valuation models, sample comparison of valuations produced by these models with independent outside valuation sources (quoted prices for exchange-traded options and futures, dealer quotes for currency and interest rate swaps
and pricing services and possibly valuation specialists for unique and highly structured derivatives), testing of inputs (such as yield curves for currency and interest rate swaps
and volatilities for options) to the internal models against current market data and testing of the consistency of the values ascribed by the company's models by the use of selected test transactions or by reference to actual sale or purchase transactions.
Some derivative products, such as options on securities, can be standardized products traded on options exchanges; others, such as currency and interest rate swaps
, often are customized to suit the needs of individual end users, and purchased and sold in the over-the-counter market.