10. Fair Value of Financial Measurements

Items measured at fair value on a recurring basis are short term investments. The following table sets forth Inotek’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy:

	Fair Value Measurements at
	December 31, 2017
	Total		Level 1		Level 2		Level 3
	(in thousands)
Assets:
Money market mutual funds (included in cash and cash equivalents)	$	76,949	$	76,949	$	—	$	—

Certificates of deposit	$	3,667	$	—	$	3,667	$	—
United States Treasury securities		17,627		17,627		—		—
Short-term investments	$	21,294	$	17,627	$	3,667	$	—

	Fair Value Measurements at
	December 31, 2016
	Total		Level 1		Level 2		Level 3
	(in thousands)
Assets:
Money market mutual funds (included in cash and cash equivalents)	$	20,698	$	20,698	$	—	$	—

Certificates of deposit	$	22,046	$	—	$	22,046	$	—
Agency bonds		5,913		—		5,913		—
United States Treasury securities		68,716		68,716		—		—
Short-term investments	$	96,675	$	68,716	$	27,959	$	—

Money market mutual funds

Inotek classifies its money market mutual funds as Level 1 assets under the fair value hierarchy as these assets have been valued using quoted market prices in active markets without any valuation adjustment.

Short-term investments

Inotek classifies its United States Treasury securities as Level 1 assets under the fair value hierarchy as these assets have been valued using quoted market prices in active markets without any valuation adjustment. Inotek classifies its certificates of deposit as Level 2 assets under the fair value hierarchy, as there are no quoted market prices in active markets, and its agency bonds as Level 2 assets under the fair value hierarchy, as these assets are not always valued daily using quoted market prices in active markets.