Which of the Following Statements Best Distinguishes the Difference Between

question 32

Multiple Choice

Which of the following statements best distinguishes the difference between real and financial assets?

• A)Real assets have less value than financial assets.
• B)Real assets are tangible; financial assets are not.
• C)Financial assets represent claims to income that are generated by real assets.
• D)Financial assets appreciate in value; real assets depreciate in value.

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Definitions:

Investment

The allocation of resources, typically money, into an asset or venture with the expectation of generating income or profit.

Equal Investment

An investment strategy where equal amounts of capital are allocated to each asset or security in a portfolio.

Portfolio

A compilation of financial holdings comprising stocks, bonds, commodities, physical currency, and equivalents to cash, which cover mutual funds and ETFs.

Stocks

Shares of ownership in a corporation, representing a claim on part of the corporation's assets and earnings.