Which of the following is an example of a financial asset?
A
Factory building
B
Corporate bond
C
Machinery
D
Land
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1
Understand the definition of a financial asset: A financial asset is an intangible asset that derives its value from a contractual claim, such as stocks, bonds, or bank deposits.
Review the options provided in the problem: Factory building, Corporate bond, Machinery, and Land.
Identify which of these options represents a financial asset. Physical assets like factory buildings, machinery, and land are tangible assets, not financial assets.
Recognize that a corporate bond is a financial asset because it represents a contractual claim to future cash flows (interest payments and principal repayment).
Conclude that the correct answer is Corporate bond, as it fits the definition of a financial asset.