With respect to audited benefit plan financial statements, an investment in a publicly-traded mutual fund is classified as what valuation level? Select one: a. Level 3 b. Level 4 c. Level 1 d. Level 2
With respect to audited benefit plan financial statements, an investment in a publicly-traded mutual fund is classified as what valuation level?
Level 3
Level 4
Level 1
Level 2
Listed stocks, bonds, funds, and other assets with a regular mark-to-market method for determining fair market value are all considered Level 1 assets. These assets are thought to have stable fair market values because of their easily discernible, transparent prices. Liquid financial assets and obligations, such as stocks or bonds, that are valued regularly on the market are considered level 1 assets. Based on their transparency and how accurately their fair market value can be determined, Level 1 assets are the highest classification. Less liquid and more challenging to determine quickly and accurately is the fair value of Level 2 and Level 3 assets.
Step by step
Solved in 2 steps
