Question

In: Finance

What are two examples of real assets and two examples of financial assets (extra credit for creativity)?

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?

Solutions

Expert Solution

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.

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