Level 1 inputs are more risky and difficult to audit than Level 3 inputs to a valuation model.

Name: Level 1 inputs are more risky and difficult to audit than Level 3 inputs to a valuation model.
Brand: Quizplus
Rating: 4.9 (45 reviews)

Question

Quizplus · Accepted Answer

Level 1 inputs are highly observable and easily verifiable, such as quoted prices in active markets. On the other hand, Level 3 inputs, which are unobservable, are highly subjective and require significant professional judgment, making them more risky and difficult to audit.

Level 1 Inputs Are More Risky and Difficult to Audit