Posts Tagged online

ECONOMIC DEVELOPMENT AND THE ROLE OF FINANCIAL ASSETS


Author: Awais Ahmad (comsian027@gmail.com)

An efficient and strong Financial System leads to the Economic Development of a nation. A country is said to be economically developed, when it has strong Financial Markets and competent Financial Intermediaries.

One of the essential criteria for the assessment of Economic Development is the quality and quantity of assets in a nation at a specific time. These assets can be classified based on their distinct characteristics. Classification of Assets is shown through a diagram chart (Fig. 2):

As we are concerned with Financial Markets, we will focus on Financial Assets.

Financial Assets:

In macro sense, Financial Assets are regulated by the government of an economy. Financial Assets smoothen the trade and transactions of an economy and give the society a standard measure of valuation. Financial Assets also represent the current/future value of physically and intangibly held assets. They show a right on another asset and include Currency Instruments (Cash, Foreign Currency etc.) and Claim Instruments (Debentures, Shares, Deposits, Unit Certificates, Tax Saving Investment etc.)

Properties of Financial Assets:

The following are the properties of Financial Assets, which distinguish them from Physical and Intangible Assets:

1.      Currency:

Financial Assets are exchange documents with an attached value. Their values are dominated in currency units determined by the government of an economy.

2.      Divisibility

Financial Instruments are divisible into smaller units. The total value is represented in terms of divisions that can be handled in a trade. The divisibility characteristic of Financial Assets enables all players, small or big, to participate in the market.

3.      Convertibility

Financial Assets are convertible into any other type of asset. This characteristic of convertibility gives flexibility to financial instruments. Financial Instruments need not necessary be converted into another form of Financial Asset; they can also be converted into Physical/Tangible and Intangible Assets.

4.      Reversibility

This implies that a financial instrument can be exchanged for any other asset and logically, the so formed asset may be transferred back into the original financial instrument.

5.      Liquidity

Liquidity implies that the present need for other forms of asset prevails over holding the financial instrument. The financial asset can be exchanged for currency with another market participant who does not have immediate cash need, but expects future benefits.

6.      Cash Flow

The holding of the financial instrument results in a stream of cash flows that are the benefits accruing to the holder of the financial instrument. However, a financial instrument by itself does not create a cash flow.

References:

Financial Management – Theory & Practice; 10e, by Eugene F. Brigham & Michael C. Ehrhardt

Management of Banking and Financial Services – 2e, by Padmalatha Suresh & Justin Paul

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

33 Comments

AUDIONIC WOOFER SPEAKER SOUND SYSTEM


Company: Audionic

Sub-Woofer Speaker Sound System

Max 4 Ultra

2.1 Speaker System

Direct Flash, USB, Memory Play Support

Wireless Remote Control

Built-In FM Radio

Quantity: 1 No.

Price: PKR 2950

(Fixed Price)

Home Delivery: PKR 300

Delivery Timings: 09.00 am to 11.00 am

(The Customers from Lahore, Pakistan Only)

Order now by calling 0303-4327730

, , , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment

FORTUNE WOOFER SPEAKER SOUND SYSTEM


Company: Fortune

Sub-Woofer Speaker and Sound System

2.1 Speaker System

Model: SP-590

(DVD and PC Playback Support)

Quantity: 1 No.

Price: PKR 2750 only

(Fixed Price)

Home Delivery: PKR 300

Delivery Timings: 09.00 am to 11.00 am

(The Customers from Lahore, Pakistan Only)

Order now by calling 0303-4327730

, , , , , , , , , , , , , , , , , , , , , , , , , ,

3 Comments

Inca IMK-384U Multimedia Keyboard


Model: IMK-384U

Quantity: 2Nos.

Price: PKR 380 Per Product (Bulk Sale)

(Fixed Price)

Home Delivery: PKR 300

Delivery Timings: 09.00 am to 11.00 am.

(The Customers from Lahore, Pakistan Only)

Order now by calling 0303-4327730

, , , , , , , , , , , , , , , , ,

8 Comments

Saltech Simple User Keyboard


Simple User Keyboard with soft keys

No Multimedia

Quantity: 3Nos.

Price: PKR 275 per product (Bulk Sale)

(Fixed Price)

Home Delivery: PKR 300.

Delivery Timings: 09.00 am to 11.00 am.

(The Customers from Lahore, Pakistan Only)

Order now by calling 0303-4327730

, , , , , , , , , , , , , , , ,

7 Comments