FRM Financial Risk Manager Practice Test

The determinants of Tom’s demand to hold an asset are: his preferences, the prices of other alternatives, and his budget constraint. An asset is defined as anything tangible or intangible that is owned by a business or company.

Key Takeaway: Tom wants to hold an asset because he expects to earn future benefit from it. Asset can be intangible: patents, trademarks, goodwill; or tangible: real estate and equipment.