Financial assets have value because of claims to future cash flows, such as stocks, bonds, and derivatives. Cars, houses, and factory equipment are physical assets, and providing services is the function of a service industry. Legal documents may be related to financial assets, but they are not financial assets themselves.

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Financial Assets

Question 10

Multiple Choice

Financial assets:

A) include cars, houses, and factory equipment.
B) provide some kind of service.
C) have value because of claims to future cash flows.
D) are not legal documents.

Correct Answer: