A government holds as investments the assets set forth below and determines its fair value as described. For each, indicate the level (1, 2, or 3) within the hierarchy of inputs to valuation techniques in which the investment should be classified and how the fair value would likely be determined.
1. Shares of common stock in Johnson Controls, Inc. a company that is listed on the New York Stock Exchange.
2. A minority interest in a retail shopping mall. Although there are similar malls in other cities, the malls are seldom bought or sold.
3. A mutual fund, which each day publishes the price at which shares can be purchased or redeemed.
4. Corporate bonds for which there is no active market. However, the bonds are rated AA by Moody's Investor service, a leading bond rating agency.
5. An interest rate swap with a major bank that cannot be sold or traded to a third party. The value of the swap will depend on the prevailing London Interbank Offered Rate (LIBOR).