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FRM Financial Risk Manager Practice Test

Category - Asset

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Tom wants to hold an asset. What determines his demand to do so?

His preferences.
The price of other assets.
His budget (wealth) constraint.
All of the above.

Explanation

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.

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FRM Financial Risk Manager Practice Test

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FRM Financial Risk Manager Practice Test

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