Chapter 1: Financial Markets Flashcards
Are very important for businesses as well as for individuals.
Assets
Are the term of the Balance-sheet that give us the total worth of a business.
Assets
Two Categories of Assets
- Real Assets
- Financial Assets
Are the ssets that a business or investor owns
Real Assets
Physical assets that help a company generate revenue
Real Assets
Carry an intrinsic value of their own because of their substance and properties are thus important to a business.
Real Assets
More popular with investors for tax benefits, less correlation with equity, attractive return, and inflation protection.
Real Assets
Are liquid assets that one can easily or quickly convert into cash.
Financial Assets
refer broadly to any marketplace where the trading of securities occurs, including the stock market, bond market, forex market, and derivatives market, among others.
Financial Markets
are vital to the smooth operation of capitalist economies.
Financial Markets
Put a check and wrong that appropriates to the basis.
Valuation
Financial Assets -❌
Real Assets - ✅
Put a check and wrong that appropriates to the basis.
Liquidity
RA - ❌
FA - ✅
Put a check and wrong that appropriates to the basis.
Tangibility
RA - ✅
FA - ❌
Put a check and wrong that appropriates to the basis.
Growth
RA - ❌
FA - ❌
Put a check and wrong that appropriates to the basis.
Purpose
RA - ✅ (for businesses)
FA - ✅ (for investment)