The FASB Has Set a Hierarchy of Inputs to Consider

question 120

Multiple Choice

The FASB has set a hierarchy of inputs to consider in assessing fair value. Price taken from a recent trade on the NIKKEI of an index stock would fall under which level?

• A) Level 0.
• B) Level 1.
• C) Level 2.
• D) Level 3.

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Definitions:

Indifference Map

A graphical representation of different bundles of goods between which a consumer is indifferent.

Marginal Rate of Substitution

The pace at which a consumer is capable of sacrificing some portion of one item to obtain a different item, without altering their overall happiness.

Marginal Rate of Substitution

The rate at which a consumer is willing to substitute one good for another while maintaining the same level of utility.

Marginal Utilities

The supplementary utility or satisfaction received by using one more unit of a good or service.