The correct answer is D. Bonds and stocks are financial assets.
A financial asset is a fungible, negotiable asset with an associated financial risk. It can be either tangible or intangible. Tangible financial assets include money, bank deposits, and shares in companies. Intangible financial assets include bonds, options, and futures contracts.
Bonds are a type of debt instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). The borrower issues bonds to raise money and agrees to pay the bondholders interest at a fixed rate for a specified period of time. The bondholders are then repaid the principal amount of the loan at the end of the term.
Stocks are a type of equity security that represents ownership in a company. When you buy a stock, you become a part-owner of the company. Stocks are bought and sold on stock exchanges, and their prices fluctuate based on supply and demand.
Both bonds and stocks are considered financial assets because they represent a claim on future cash flows. Bonds represent a claim on the interest payments and principal repayments made by the borrower, while stocks represent a claim on the dividends and capital appreciation of the company.