Wells Fargo (WF) discloses fair values (FV) of applicable investments in footnote (Note 15) of the 12/31/22 10-K filed with the SEC based on the FV hierarchy. For each asset, explain why the FV hierarchy classification makes sense based on the description of the valuation process.

Marketable Equity Securities

Level 1: "We use quoted prices to determine the FV of marketable equity securities, as the securities are publicly traded."

Mortgage Servicing Rights (MSR)

Level 3: "MSRs do not trade in an active market with readily observable prices. We determine the fair value of MSFs using a valuation model that estimates the present value of expected future net servicing income. The model incorporates assumptions that market participants use in estimating future net servicing income cash flows, including estimates of prepayment speeds (including housing price volatility for residential MSRs), discount rates, default rates ..."

Loans Held For Sale (LHFS)

Level 2: "FV for LHFS ... is based on quoted market prices, where available, or the prices of other mortgage whole loans with similar characteristics."