An Intangible Asset

question 125

Multiple Choice

An intangible asset

• A)derives its value from the rights and privileges it provides the owner.
• B)is worthless because it has no physical substance.
• C)is converted into a tangible asset during the operating cycle.
• D)cannot be classified on the balance sheet because it lacks physical substance.

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Definitions:

Abnormal Returns

Returns on a security or portfolio that differ significantly from the expected rate, given the asset's risk level and the market's overall performance.

Spread

The difference between two prices, yields, or interest rates, commonly used in financial markets to measure the gap between bid and ask prices.

Public Issue

The creation and sale of securities on public markets.

Rights Offer

An invitation to existing shareholders to purchase additional shares in the company at a discounted price, usually to raise capital.