Financial Asset

A Financial Asset is a financial resource that is an intangible economic asset (derives monetary value from contractual claims).

• AKA: Financial Security, Financial Instrument Holding, Financial Investment, Financial Claim.
• Context:
  • It can typically represent Ownership Interest through financial asset equity rights.
  • It can typically provide Payment Entitlement through financial asset contractual claims.
  • It can typically store Economic Value through financial asset market valuation.
  • It can typically generate Investment Return through financial asset income streams.
  • It can typically offer Wealth Preservation through financial asset purchasing power maintenance.
  • It can typically create Portfolio Diversification through financial asset correlation characteristics.
  • It can typically enable Risk Exposure Management through financial asset hedging applications.
  • It can typically maintain Exchange Value through financial asset market pricing.
  • It can typically support Financial Planning through financial asset growth potential.
  • It can typically provide Liquidity Access through financial asset conversion ability.
  • ...
  • It can often experience Value Fluctuation due to financial asset market volatility.
  • It can often require Custodial Protection through financial asset safekeeping services.
  • It can often necessitate Regulatory Compliance through financial asset reporting requirements.
  • It can often involve Tax Considerations through financial asset income treatment.
  • It can often support Retirement Funding through financial asset long-term accumulation.
  • It can often enable Collateral Utilization through financial asset lending arrangements.
  • It can often facilitate Inheritance Transfer through financial asset estate planning.
  • It can often experience Inflation Impact through financial asset purchasing power change.
  • It can often undergo Performance Evaluation through financial asset benchmark comparison.
  • It can often require Professional Management through financial asset advisory services.
  • ...
  • It can range from being a Low-risk Financial Asset to being a High-risk Financial Asset, depending on its financial asset risk profile.
  • It can range from being a Short-term Financial Asset to being a Long-term Financial Asset, depending on its financial asset investment horizon.
  • It can range from being a Liquid Financial Asset to being an Illiquid Financial Asset, depending on its financial asset market tradability.
  • It can range from being a Passive Financial Asset to being an Active Financial Asset, depending on its financial asset management requirement.
  • It can range from being a Traditional Financial Asset to being an Alternative Financial Asset, depending on its financial asset investment classification.
  • It can range from being a Domestic Financial Asset to being an International Financial Asset, depending on its financial asset geographical origin.
  • It can range from being a Plain Financial Asset to being a Complex Financial Asset, depending on its financial asset structure sophistication.
  • It can range from being a Regulated Financial Asset to being an Unregulated Financial Asset, depending on its financial asset oversight framework.
  • It can range from being a Small-denomination Financial Asset to being a Large-denomination Financial Asset, depending on its financial asset investment threshold.
  • ...
  • It can facilitate Wealth Accumulation Strategy for financial asset portfolio growth.
  • It can support Income Generation Plan through financial asset yield optimization.
  • It can enable Capital Preservation Approach via financial asset defensive allocation.
  • It can provide Financial Independence Path through financial asset compounding growth.
  • It can assist Estate Planning Process through financial asset inheritance structure.
  • It can enhance Business Financing Options through financial asset collateralization.
  • It can strengthen Banking System Functionality through financial asset intermediation.
  • It can promote Capital Market Development through financial asset secondary trading.
  • It can facilitate International Investment Flows through financial asset cross-border allocation.
  • It can support Monetary Policy Transmission through financial asset interest rate sensitivity.
  • ...
• Examples:
  • Financial Asset Classes, such as:
    • Equity Financial Assets, such as:
      • Common Stock Financial Asset representing corporate ownership stake.
      • Preferred Stock Financial Asset combining dividend priority with equity characteristics.
      • Exchange-Traded Fund Financial Asset providing diversified market exposure.
      • Real Estate Investment Trust Financial Asset offering property portfolio ownership.
      • Private Equity Financial Asset investing in non-public company stakes.
    • Fixed Income Financial Assets, such as:
      • Government Bond Financial Asset representing sovereign debt obligations.
      • Corporate Bond Financial Asset providing corporate debt investment.
      • Municipal Bond Financial Asset financing local government projects.
      • Treasury Bill Financial Asset offering short-term government borrowing.
      • Certificate of Deposit Financial Asset providing guaranteed bank return.
      • Mortgage-Backed Securities Financial Asset representing pooled home loans.
      • Asset-Backed Securities Financial Asset securitizing consumer debt portfolios.
    • Derivative Financial Assets, such as:
      • Option Contract Financial Asset providing contingent purchase rights.
      • Futures Contract Financial Asset establishing standardized future delivery obligations.
      • Swap Agreement Financial Asset exchanging specified cash flow streams.
      • Forward Contract Financial Asset creating customized future delivery commitments.
      • Credit Default Swap Financial Asset transferring default risk exposure.
      • Structured Product Financial Asset combining multiple financial components.
    • Cash Equivalent Financial Assets, such as:
      • Money Market Fund Financial Asset providing short-term liquid investment.
      • Commercial Paper Financial Asset representing short-term corporate borrowing.
      • Repurchase Agreement Financial Asset facilitating short-term secured lending.
      • Treasury Bill Financial Asset offering government-backed liquidity.
      • Bank Deposit Financial Asset providing insured cash position.
    • Alternative Financial Assets, such as:
      • Hedge Fund Financial Asset pursuing sophisticated investment strategies.
      • Private Equity Financial Asset acquiring non-public company stakes.
      • Venture Capital Financial Asset funding early-stage business growth.
      • Real Estate Financial Asset investing in property ownership.
      • Collectible Financial Asset holding tangible value items.
      • Infrastructure Financial Asset financing essential public facilityies.
      • Natural Resource Financial Asset controlling commodity production rights.
  • Financial Asset Ownership Structures, such as:
    • Direct-held Financial Assets, such as:
      • Personal Brokerage Account Financial Asset maintaining individual investment control.
      • Retirement Account Financial Asset providing tax-advantaged investment.
      • Bank Account Financial Asset offering immediate liquidity access.
      • Treasury Direct Financial Asset enabling direct government security purchase.
    • Indirect-held Financial Assets, such as:
      • Mutual Fund Financial Asset providing professional portfolio management.
      • Exchange-Traded Fund Financial Asset offering index-based diversification.
      • Insurance Product Financial Asset combining investment component with protection element.
      • Pension Fund Financial Asset delivering retirement income security.
  • Financial Asset Time Horizons, such as:
    • Short-term Financial Assets, such as:
      • Money Market Financial Asset preserving principal stability.
      • Ultra-Short Bond Financial Asset providing minimal duration exposure.
      • Bank Deposit Financial Asset offering immediate access liquidity.
      • Treasury Bill Financial Asset maintaining short maturity profile.
    • Intermediate-term Financial Assets, such as:
      • Medium-term Corporate Bond Financial Asset balancing yield with moderate duration.
      • Balanced Fund Financial Asset combining growth and income objectives.
      • Intermediate Municipal Bond Financial Asset providing tax-efficient moderate duration.
    • Long-term Financial Assets, such as:
      • Growth Stock Financial Asset pursuing capital appreciation.
      • Long-term Government Bond Financial Asset capturing extended duration premium.
      • Retirement Target Date Fund Financial Asset supporting multi-decade planning horizon.
      • Infrastructure Financial Asset financing multi-generational projects.
  • Financial Asset Risk Levels, such as:
    • Conservative Financial Assets, such as:
      • Treasury Bond Financial Asset providing government-backed security.
      • Investment-Grade Corporate Bond Financial Asset offering reliable credit quality.
      • Blue-chip Stock Financial Asset delivering established company stability.
      • Certificate of Deposit Financial Asset guaranteeing principal protection.
    • Moderate Financial Assets, such as:
      • Balanced Fund Financial Asset mixing equity and fixed income exposure.
      • Dividend Stock Financial Asset combining income with moderate growth.
      • Investment-Grade Corporate Bond Financial Asset offering yield advantage over government securities.
    • Aggressive Financial Assets, such as:
      • Emerging Market Equity Financial Asset pursuing high-growth potential.
      • Small-cap Growth Stock Financial Asset targeting business expansion opportunity.
      • High-Yield Bond Financial Asset accepting elevated credit risk for increased income.
      • Venture Capital Financial Asset funding early-stage enterprise development.
  • Financial Asset Technological Evolutions, such as:
    • Traditional Financial Assets, such as:
      • Paper Stock Certificate Financial Asset representing physical ownership evidence.
      • Bearer Bond Financial Asset requiring physical coupon redemption.
      • Bank Passbook Financial Asset recording manual transaction history.
    • Digital Financial Assets, such as:
      • Electronic Security Financial Asset utilizing dematerialized recording system.
      • Robo-advised Portfolio Financial Asset employing algorithmic management.
      • Cryptocurrency Financial Asset utilizing blockchain technology.
      • Tokenized Traditional Asset Financial Asset representing digitized ownership rights.
      • Smart Contract Financial Asset embedding automated execution logic.
  • ...
• Counter-Examples:
  • Tangible Economic Assets, such as:
    • Real Estate Property, which constitutes physical land and building structures rather than financial asset contractual claims.
    • Physical Commodity, which comprises tangible goods rather than financial asset claim rights.
    • Business Equipment, which represents tangible production tools rather than financial asset monetary instruments.
    • Consumer Durable Good, which provides physical usage benefits rather than financial asset investment returns.
    • Precious Metal Holding, which stores intrinsic material value rather than financial asset contractual worth.
    • Inventory Item, which contains physical production output rather than financial asset monetary claims.
    • Infrastructure Asset, which delivers physical utility services rather than financial asset investment yields.
    • Agricultural Land, which produces tangible crop yields rather than financial asset monetary returns.
  • Intangible Non-Financial Assets, such as:
    • Intellectual Property, which creates legal protection rights rather than financial asset monetary claims.
    • Human Capital, which comprises personal knowledge and skill sets rather than financial asset tradable holdings.
    • Business Goodwill, which represents enterprise reputation value rather than financial asset market security.
    • Brand Recognition, which generates marketing advantage rather than financial asset direct return.
    • Organizational Process, which establishes operational efficiency rather than financial asset monetary yield.
    • Data Resource, which provides informational advantage rather than financial asset investment return.
    • Regulatory License, which grants operational permission rather than financial asset ownership stake.
    • Business Relationship, which creates commercial advantage rather than financial asset monetary claim.
  • Financial Liabilitys, such as:
    • Mortgage Loan, which creates debt obligations rather than financial asset claim rights.
    • Credit Card Balance, which generates payment requirements rather than financial asset investment returns.
    • Corporate Debt, which establishes repayment responsibility rather than financial asset ownership interest.
    • Lease Obligation, which requires payment commitments rather than financial asset investment holdings.
    • Tax Liability, which mandates government payment requirements rather than financial asset value claims.
    • Insurance Premium Obligation, which creates protection payment commitments rather than financial asset investment value.
• See: Investment Portfolio, Asset Allocation Strategy, Wealth Management Approach, Financial Instrument, Capital Market, Financial Institution, Risk-Return Trade-off, Valuation Model, Portfolio Theory, Investment Goal, Financial Planning, Market Liquidity, Economic Indicator, Financial Analysis, Diversification Strategy, Risk Management, Financial Regulation, Monetary Policy, Investing Principle, Financial Technology, Financial Literacy.

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References

2014

• (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/financial_asset Retrieved:2014-6-1.
  • A financial asset is an intangible asset that derives value because of a contractual claim. Examples include bank deposits, bonds, and stocks. Financial assets are usually more liquid than tangible assets, such as land or real estate, and are traded on financial markets. According to the International Financial Reporting Standards (IFRS), a financial asset is defined as one of the following: * Cash or cash equivalent; * Equity instruments of another entity; * Contractual right to receive cash or another financial asset from another entity or to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity; * Contract that will or may be settled in the entity's own equity instruments and is either a non-derivative for which the entity is or may be obliged to receive a variable number of the entity's own equity instruments, or a derivative that will or may be settled other than by exchange of a fixed amount of cash or another financial asset for a fixed number of the entity's own equity instruments.

2013

• http://www.investopedia.com/terms/f/financialasset.asp
  • QUOTE: An asset that derives value because of a contractual claim. Stocks, bonds, bank deposits, and the like are all examples of financial assets. …

    … Unlike land and property -- which are tangible, physical assets--financial assets do not necessarily have physical worth.

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