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With examples explain the difference between real assets and financial assets?
Wiki User
∙ 14y ago
Real asset: These are used to produce the Firm's product and services. They include Tangible assets such as;
- Machinery
- Factories
- Vehicles
- Offices.
Furthermore, real asset includes intangible assets such as;
- Technical knowledge (intellectual property IP)
- Trademarks
- Patents.
Financial asset: The firm finances it's investments in real asset by issuing financial assets in the debt market for investors. A share of stock is financial asset which has a value as a claim on the firm's real asset and the income those assets will produce. A bank loan is a financial asset
Financial market: Where stocks, bonds security's are traded or change hands. Investor (shareholder): Who lend the money to the issuer in expectation of profit on investment).
Edited by Naren
Wiki User
∙ 14y ago
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