**Core Concept**
The diagnosis and management of neonatal jaundice require a thorough understanding of bilirubin metabolism and liver function in newborns. **Bilirubin** is a byproduct of heme catabolism, and its elevated levels can lead to jaundice.

**Why the Correct Answer is Right**
The most accurate diagnostic investigation for neonatal jaundice is a **bilirubin level** measurement, specifically the **total bilirubin (TBil)** level. This is because TBil reflects the sum of unconjugated and conjugated bilirubin, providing a comprehensive assessment of bilirubin metabolism. Elevated TBil levels can indicate various conditions, such as breastfeeding difficulties, hemolysis, or liver dysfunction.

*Option A:** **Bilirubin level** is not the most specific test for diagnosing neonatal jaundice, as it does not differentiate between unconjugated and conjugated bilirubin.
*Option B:** **Blood smear** may be helpful in diagnosing hemolytic disorders, but it is not the primary diagnostic tool for neonatal jaundice.
*Option C:** **Liver function tests (LFTs)** are essential for assessing liver function but are not the most direct diagnostic tool for neonatal jaundice.

**Clinical Pearl / High-Yield Fact**
It's essential to remember that the **Kempe classification** system helps in the early detection and management of neonatal jaundice. This system categorizes jaundice into three levels based on the bilirubin level: 8 mg/dL (Level 3).

**Correct Answer:** B. Blood smear.