Real Assets vs Financial Assets

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Questions and Answers

Which of the following is an example of a real asset?

  • Stocks
  • Bonds
  • Machines (correct)
  • Intellectual property

Which type of financial asset represents ownership share in a corporation?

  • Equity (correct)
  • Fixed-Income Securities
  • Derivatives
  • Corporate bonds

What do financial assets contribute directly to?

  • Productive capacity (correct)
  • Current consumption
  • Interest rates
  • Stock prices

Which type of financial asset provides payoffs determined by the prices of other underlying assets?

<p>Derivatives (D)</p> Signup and view all the answers

What role do financial markets play in the economy?

<p>All of the above (D)</p> Signup and view all the answers

Which of the following is NOT a mechanism to mitigate agency problems?

<p>Providing takeover threat for poor performers (C)</p> Signup and view all the answers

What act was passed in 2002 in response to ethics scandals?

<p>Sarbanes-Oxley Act (B)</p> Signup and view all the answers

Which of the following is NOT an example of an accounting scandal?

<p>Nortel Networks (A)</p> Signup and view all the answers

What role do stock prices largely reflect?

<p>Market participants' collective judgment (D)</p> Signup and view all the answers

What does the Sarbanes-Oxley Act focus on?

<p>Corporate governance (B)</p> Signup and view all the answers

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