Why are financial assets generally more liquid than real assets?
Financial assets are generally more liquid than real assets cause conversion rates have already been measured in diverse valued markets. Also, time rate of conversion based of historical or current market or future market projections already have been made or established. Other implied information may include the resources or sources where these conversions may be applied and at what times to garner maximum values of the financial assets.
Example your real assets are simply money of one nation but if deposited in another nation it may not access the same value. It maybe you converted at a station that charges higher conversion fees taking away it's value.
While some financial holdings have a monetary value but may have with them precises instructions to capitalize on greater return via going to certain other channels to liquidate them for a higher yields so say a stock worth in raw resources worth $100 in the U.S. may in another nations market be worth $400 that doesn't have such raw resources and can be negotiated by other means the monetary conversion of a U.S. assumed value of $100 dollars if the dollar is weaker in some markets it may be the case where that the U.S. dollar has higher value of say 6 times in a different business time cycle. Despite the increase in right markets the conversion fees vary and may be safer to go with a $400 market with lowest fees then garner the liquid via that market that may have lower fees in conversion per economic policies of that U.S valuation and return a higher gain on investment.
so in fact some financial assets may have a more diverse option for higher liquid gains. Yet, again future economic policies may either increase these values or decrease them significantly. Understanding how and where they play out one can garner higher liquid yields per real liquid assets as unlike money some bonds/stocks/certificates come with established policies/rules of to trade in various markets at different variable rates different form current money values. These trade rules must be followed to the letter to be legitimate and incur pre-established higher dedicated fees/costs to do so.
Hence why the same financial assets may come with different vehicle rates pending the firm and resources of the firms established analysis of future returns or reports some are sold with others are optional without and require the investor to seek independent source reports with or without pre-established sources for liquidation.
Hence the not all financial assets equal see below:
Also, the legitimacy or accuracy in which these claims vary hence why so many lost in derivative valuation investments.....due to lack of providing accurate variables of source for valuations in various markets as well as accurate futures speculations.
As well as the reporting of future holdings as current buying set rate or to hedge future buying set rates in capital holdings- some financial holding may be but not limited to buying per set rate say $20 per share rights but if shares increase to $60 per share then one may garner more revenue at discount but again loss may incur if those shares fall below the $20 holding to say $15 per share purchase price again cycle analysis projection is key as well as solid global economic trend projections. In some cases these projections as well as established sources of conversions may be hyped - or false claims or the conversion sources may no longer incline operations when market valuations are at their highest gain. Like assets some risk does apply many are willing to do so for the higher yields.
By, Mohammad Shiran Khan. Physical assets are more stable in nature like plant, machinery, tools, land, building e.t.c where as financial assets are paper or electronic claims include shares, bonds, marketable securities some issuers are govt or corporate body. financial assets are used to purchase Physical asset. and financial assets get more returns when compared with physical assets financial assets liquid in nature.
Why is the distinction between current and non current assets important when preparing financial statements?
Capital is generally the assets, often monetary, that are available to generate more assets. Thus the liquidity of capital should be high. Restructuring them means reallocating them to improve their availability (liquidity). The process requires selling assets to buy different ones in order to improve your capital (monetary) position so that you can improve your asset position thus enabling you to earn more with them. It is generally undertaken by companies that are generally doing…
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Capital Revenue Proceeds from the sale of non-financial capital assets, including land, intangible assets, stocks, and fixed capital assets of buildings, construction, and equipment of more than a minimum value and usable for more than one year in the process of production, and receipts of unrequited transfers for capital purposes from non-governmental sources. http://www.treasuryota.us/ust100/lessons/glossary.htm
Capital is generally the assets, often monetary, that are available to generate more assets. Thus the liquidity of capital should be high. Restructuring them means reallocating them to improve their availability (liquidity). The process requires selling assets to buy different ones in order to improve your capital (monetary) position so that you can improve your asset position thus enabling you to earn more with them.
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