Asked by Laura De Luna on Jun 30, 2024
Verified
Financial assets can be distinguished from real assets in that financial assets:
A) are pieces of paper rather than tangible, physical objects.
B) are not intended to provide services like transportation or shelter.
C) have value because they provide their owners with claims to future cash flows.
D) All of the above
Real Assets
Physical or tangible assets such as real estate, commodities, and natural resources.
Future Cash Flows
Projections of the amount of money that is expected to be generated by an investment in the future.
Financial Assets
Assets that derive value from a contractual claim, such as bank deposits, stocks, bonds, and derivatives.
- Identify the differences between physical assets and financial assets.
Verified Answer
FH
fatema hassnJul 01, 2024
Final Answer :
D
Explanation :
Financial assets are generally not tangible and are represented by pieces of paper or digital records, such as stocks, bonds, and derivatives. They are not intended to provide services like transportation or shelter like real assets, such as houses or cars. The value of financial assets comes from the claims they provide their owners to future cash flows, such as interest, dividends, or capital gains. Therefore, all the options mentioned in the question are correct.
Learning Objectives
- Identify the differences between physical assets and financial assets.