The Following Is True of Financial Assets

question 38

Multiple Choice

The following is true of financial assets:

• A)companies issue financial assets in order to raise capital (money).
• B)investors purchase financial assets in order to earn a return on funds they don't    currently need.
• C)they differ from real assets in that they are pieces of paper as opposed to physical objects.
• D)All of these are true.

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Definitions:

Promoters

Individuals or companies that are involved in the planning and establishment of a company, or those who actively support or recommend something.

Stock Dividend

A distribution of additional shares to shareholders at no extra cost, based on the number of shares they already own.

Corporation's Assets

Resources owned by a corporation that have economic value and can contribute to the company's future income and benefits.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting liabilities, representing ownership interest held by shareholders.