What is a financial asset?

An asset is known as a resource, which allows its owner the right to obtain income in the future, are usually issued by economic entities, whether companies, government, or others. Financial assets can be obtained through investments or businesses.

Basic principles of a financial asset

The assets have a number of standard features, which are related to each other, these characteristics are known as profitability, liquidity, and risk.

Cost effectiveness


Represents the acceptance and interest that investors have in the asset, this will be affected by the benefits that can be obtained from the investment. This is the most relevant concept of a business, because it will be possible to know the success that will be obtained from it.

Risk

This concept refers to the guarantee offered by the asset, a principle that affects the return of the asset, since generally the assets with a high level of risk do not insure the investment or capital of the individual, this is because the value of said asset It is highly unstable, and can generate future losses.

Liquidity

It is the ability of the asset to transform itself into money without causing losses, while an asset is more liquid will obtain greater profitability, thus becoming a risk-free asset. In this way, the relationship between the principles of the assets is fulfilled.