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Question
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Posted 2 months ago

Which of the following is a paper claim that entitles the buyer of that claim to future income from the seller?

Choose 1 answer:
(A) Money
B) A liability
(C) A physical asset
(D) A financial asset
(E) An asset
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Answer from Sia
Posted 2 months ago
Solution by Steps
step 1
Identify the financial instrument that represents a claim to future income
step 2
Analyze the options given: Money is a medium of exchange and not a claim to future income; a liability is an obligation of the seller rather than a claim for the buyer; a physical asset is a tangible item of value; a financial asset represents ownership of a claim to future income; an asset is a broad term that includes both physical and financial assets
step 3
Determine which option specifically fits the description of a paper claim that entitles the buyer to future income from the seller
Answer
D
Key Concept
Financial Asset
Explanation
A financial asset is a paper claim that entitles the buyer to future income from the seller, such as stocks, bonds, or other financial instruments.

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