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

Question

Quizplus · Accepted Answer

Financial assets represent ownership claims on real assets and the income or cash flow generated by them, while real assets are tangible assets that have intrinsic value, such as land, buildings, and equipment. Financial assets derive their value from the underlying real assets, but their value can also be influenced by other factors such as interest rates and investor sentiment. Real assets, on the other hand, can depreciate over time due to wear and tear or obsolescence, but they can also appreciate in value if their demand or scarcity increases. Therefore, option C best distinguishes the difference between real and financial assets.

Which of the Following Statements Best Distinguishes the Difference Between