What does FMV stand for?

What does FMV stand for?

• A. Fixed Market Value
• B. Fair Market Value
• C. Federal Market Value
• D. Free Market Value

Answer: (B)

FMV is the price that would be paid for an asset in an open and competitive market by informed, willing buyers and sellers, with no undue pressure and on a specific date. That definition emphasizes two things: the market aspect (current conditions and liquidity) and the “fair” aspect (arms-length, reasonable terms). That’s why the correct choice is Fair Market Value. The other options aren’t standard terms for this concept: Fixed Market Value suggests a set price regardless of market changes, which isn’t how valuation works; Federal Market Value isn’t a recognized term in valuations; Free Market Value isn’t the established descriptor used in professional contexts.

FMV is the price that would be paid for an asset in an open and competitive market by informed, willing buyers and sellers, with no undue pressure and on a specific date. That definition emphasizes two things: the market aspect (current conditions and liquidity) and the “fair” aspect (arms-length, reasonable terms). That’s why the correct choice is Fair Market Value. The other options aren’t standard terms for this concept: Fixed Market Value suggests a set price regardless of market changes, which isn’t how valuation works; Federal Market Value isn’t a recognized term in valuations; Free Market Value isn’t the established descriptor used in professional contexts.