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Financial instrument whose value vary with the value of an underlying asset?
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What is Book value vs fair value?
Book value is the value of asset shown in financial statements while fair value is the value at which asset can be sold in market
Where is inventory is reported in financial statement?
Value of Inventory is an asset on the balance sheet.
What is the difference between an Operating asset and a financial asset?
A financial asset are short term investments in private equity, bonds, hedge funds, and other type of securities. Operating assets are investments that include all internal and external factors within a company. Operating assets hold more value than a financial asset.
Do financial statements show the market value of an asset?
In general, financial statements show the book value of an asset, not the market value. The few instances where the financial statements will show market valuations are as follows: * When derivatives are carried for hedge purposes, they are periodically marked-to-market * When an investment appears to materially have lost value (when comparing to similar instruments in the market or, for illiquid markets, when operating cash flows from an investment go down markedly), conservatism requires the asset value to be moved to the "market" or lower price
When an asset is sold a gain occurs when the?
Gain on sale of asset is occured when actual value of asset is less then the sale value of asset.
What Is an Underlying Asset in binary options?
An option's underlying asset is a market traded asset, such as currency exchange rate, stocks or bonds, and market indices. Fluctuations in the market value of an underlying asset serve as the basis for the value of an option vis-à-vis an option's strike price.
What is Book value vs fair value?
Book value is the value of asset shown in financial statements while fair value is the value at which asset can be sold in market
What are the characteristics of Financial asset?
market value, liquidity and volatility
What is the valuation of a financial asset based on?
In finance, valuation is the process of estimating what something is worth. The valuation of a financial asset is based on the absolute value, relative value, or option pricing models.
What is an extrinsic value?
Extrinsic value is the portion of an option's price that is not due to its intrinsic value (the actual value of the underlying asset at that point in time). It is influenced by factors such as time until expiration, volatility of the underlying asset, and interest rates. High extrinsic value is typical of options with longer expiration dates or higher levels of implied volatility.
What are derivative trades?
Derivatives are financial instruments that derive their price and values from their underlying asset. Examples of derivatives are options and futures. Both options and futures derive their value from their underlying stocks. Trading derivatives means buying options or futures instead of the stocks itself mainly for leverage.
What are the smilarities between real and financial asset?
www.investopedia.com Real assets: Physical or identifiable assets such as gold, land, equipment, patents, etc. They are the opposite of a financial asset. Real assets tend to be most desirable during periods of high inflation. Financial assets: An asset that derives value because of a contractual claim. Stocks, bonds, bank deposits, and the like are all examples of financial assets. Unlike land and property--which are tangible, physical assets--financial assets do not necessarily have physical worth.
What is hair cuts in banking?
Hair cut is the percentage subtracted from the face value of an asset being sold - hair cuts rise with the underlying risk of the asset.
Where is inventory is reported in financial statement?
Value of Inventory is an asset on the balance sheet.
Difference between put option and call option?
The holder/purchaser/owner of a call option contract has the right to buy an asset (or call the asset away) from a writer/seller of a call option contract at the pre-determined contract or strike price. The holder/purchaser/owner of a call option contract expects the price of the underlying asset to rise during the term or duration of the call contract, for as the value of the underlying asset increases so does the value of the call option contract. Conversely, the write/seller of a call option contract expects the price of the underlying asset to remain stable or to decline. The holder/purchaser/owner of a put option contract has the right to sell an asset (or put the asset) to a writer/seller of a put option contract at the pre-determined contract or strike price. The holder/purchaser/owner of a put option contract expects the price of the underlying asset to decline during the term or duration of the put contract, for as the value of the underlying asset declines the contract value increases. Conversely, the writer/seller of a put option contract expects the price of the underlying asset to remain stable or to rise.
What is the difference between a real asset and a financial asset?
A real asset is a tangible asset like gold or real estate. You can hold it or place your hand on it. It has intrinsic value in and of itself. A financial asset is not tangible. Instead, its existence is "represented by evidence of its existence such as a paper certificate, like money, a savings passbook, a stock certificate, or a bond. The paper in money has no intrinsic value. Its value is derived by virtue of what it represents.
What were the underlying success factor for Sun Life Financial Inc.?
Value for money.
