B is corrent. Level 3 is the lowest priority for valuation purposes and includes unobservable inputs, such as an entity’s own assumptions, expected cash flows, or a firm’s forecasts.
A is incorrect because there is no Level 4.
C is incorrect because Level 1 has the highest priority for valuation purposes and uses objective inputs such as quoted prices from active markets.
D is incorrect because Level 2 is lower priority than Level 1.
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