KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

13. Kentucky State University Foundation, Inc., continued

d. Fair Value Measurements, continued

Mutual funds: Valued at the daily closing price as reported by the fund. Mutual funds held by the Foundation are open-end mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value (NAV) and to transact at that price. The mutual funds held by the Foundation are deemed to be actively traded.

Real estate investment trust: Valued at the NAV of shares held by the Foundation at year end.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Foundation believes its valuation methods are appropriate and consistent with those of other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Fair value measurements as of June 30, 2016 are as follows:

Level 1Level 2Level 3Total
Common stocks$ 3,481,670$ -$ -$ 3,481,670
Mutual funds1,762,207--1,762,207
Municipal bonds-270,742-270,742
Corporate bonds-2,355,075-2,355,075
U.S government securities385,510--385,510
Real estate investment trust-8,129-8,129
Equity exchange traded funds183,151--183,151
Total$ 5,812,538$ 2,633,946$ -$ 8,446,484

Fair value measurements as of June 30, 2015 are as follows:

Level 1Level 2Level 3Total
Common stocks$ 4,152,722$ -$ -$ 4,152,722
Mutual funds2,054,938--2,054,938
Municipal bonds-292,540-292,540
Corporate bonds-1,960,343-1,960,343
U.S government securities651,670--651,670
Real estate investment trust-160,258-160,258
Equity exchange traded funds215,083--215,083
Total$ 7,074,413$ 2,413,141$ -$ 9,487,554