ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A corporate bond
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A machine
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A patent
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A factory
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Detailed explanation-1: -Financial assets are a liquid property that derives value from a contractual right or ownership claim. Stocks, bonds, mutual funds, bank deposits, investment accounts, and good old cash are all examples of financial assets.
Detailed explanation-2: -Stocks are financial assets, not real assets. Financial assets are paper assets that can be easily converted to cash. Real assets are tangible and therefore have intrinsic value.
Detailed explanation-3: -Investors can reduce their risks by diversifying their assets. Bonds are one type of asset, along with shares of stock (or equity), cash, and other investments. Investors also can diversify the types of bonds they hold.
Detailed explanation-4: -1 Real assets broadly include property, infrastructure, timberland, shipping, and natural resources. In addition, assets can be held in a listed or an unlisted form. Real assets provide storage of value over the long term, inflation sensitivity, and diversification within a portfolio (see Figure 1).