Which of the Following Statements Best Distinguishes the Difference Between

question 92

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 is generated by real assets.
• D) Financial assets appreciate in value; real assets depreciate in value.

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Definitions:

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts, as well as the physical factors of production including machinery and buildings.

Character

In finance, character often refers to one of the "Three Cs" (character, capacity, collateral) used to assess a borrower's creditworthiness, focusing on their reputation for repaying debts.

Financial Reserves

Funds or assets that are set aside to meet future liabilities, contingencies, or unforeseen expenditures.

Capital

Resources made available for the use in the production of goods or services, often categorized into financial, human, or physical forms.