Stocks, bonds, and cash are examples of what type of assets?

Stocks, bonds, and cash are categorized as financial assets because they represent ownership or a claim to future cash flows. Financial assets are not physical in nature; rather, they derive their value from a legal claim and the economic benefits they provide.

For instance, owning stock in a company means you own a portion of that company and have the right to a share of its profits, typically in the form of dividends. Bonds represent debt; when you buy a bond, you are essentially lending money to the issuer in exchange for periodic interest payments and the return of the bond's face value at maturity. Cash is the most liquid form of financial asset, serving as a medium of exchange and a store of value.

In contrast, physical assets refer to tangible items, such as real estate or equipment, which have intrinsic value. Intangible assets include non-physical items like trademarks, patents, or goodwill, that hold value but cannot be touched. Human capital relates to the economic value of an individual's skills, knowledge, and experience, rather than assets like stocks or bonds. Thus, the classification of stocks, bonds, and cash as financial assets highlights their role as instruments of investment and wealth management.