Capital assets:

• Continuous performance.
• NPV valuation method.
• Examples: stocks, bonds.

Store of value assets:

• Cannot be consumed.
• Don't generate income.
• Examples: foreign exchange, art, antiquities.

Consumable or transferrable (C/T) assets:

• Don't generate income.
• Have an economic value. Can be consumed or used as input goods.
• Examples: commodities.

Market supply and demand determine commodity prices.

Practice Question 1

Art is considered to be an example of:

A. capital assets.
B. store of value assets.
C. consumable assets.

Correct Answer: B

Practice Question 2

Continuous performance is a characteristic of:

A. capital assets.
B. store of value assets.
C. consumable assets.

Correct Answer: A

Practice Question 3

Commodity prices can be determined using:

I. DCF method.
II. market supply and demand.
III. CAPM.

Correct Answer: II only

The value of a particular commodity is dependent upon basic laws of supply and demand.

Practice Question 4

Which factors can cause the commodity prices to decline?

I. Global supplies are finite for many commodities.
II. The introduction of new supplies and new production technology.
III. The lack of cash flows from some commodities.

Correct Answer: II only

Practice Question 5

Real estate can be classified as both:

I. capital assets.
II. store of value assets.
III. consumable assets.

A. I and II
B. II and III
C. I and III

Correct Answer: A

It promises rental stream. It can also be used for the owner's own purpose.