In: Finance
What are two examples of real assets and two examples of financial assets (extra credit for creativity)?
If you have assets of $1000 and liabilities of $500 what is your net worth?
What is one major difference between equity and fixed income securities?
1.
Real Assets
Machinery, land, furniture
Financial assets
Share , bond, treasury bills.
2.
Net worth = Assets- liabilities
= 1000-500
= 500.
3.
Rate of return is fixed in fixed income securities. It also has lower risk.(eg: fixed deposit).
Rate of return is variable in case of equity. It can be either 20% or 0%. There is more Risk in equity and also the return can be Higher also.
1.
Real Assets
Machinery, land, furniture
Financial assets
Share , bond, treasury bills.