Financial Asset
A financial asset is an asset that has a monetary value and can be exchanged for goods or services. Financial assets are typically divided into two categories: liquid assets, which can be quickly converted into cash, and illiquid assets, which cannot be quickly converted into cash. Examples of liquid assets include cash, stocks, bonds, and mutual funds. Examples of illiquid assets include real estate, artwork, and collectibles.
History of Financial Assets
Financial assets have been around since the dawn of civilization. In ancient times, people used gold, silver, and other precious metals as a form of currency. As civilizations developed, so did the concept of financial assets. In the Middle Ages, people began to use paper money and coins as a form of currency. In the modern era, financial assets have become increasingly complex, with the introduction of stocks, bonds, mutual funds, and other financial instruments.
Comparison of Liquid and Illiquid Assets
| Asset Type | Liquidity | Convertibility |
|---|---|---|
| Liquid Assets | High | High |
| Illiquid Assets | Low | Low |
Summary
Financial assets are assets that have a monetary value and can be exchanged for goods or services. They are typically divided into two categories: liquid assets, which can be quickly converted into cash, and illiquid assets, which cannot be quickly converted into cash. For more information on financial assets, visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Cash
- Stocks
- Bonds
- Mutual Funds
- Real Estate
- Artwork
- Collectibles
- Liquidity
- Convertibility
- Investopedia
