Final answer:
A farmer's assets could include current assets like cash and inventory, and fixed assets such as land and equipment. Stocks generally offer higher returns but also carry more risk. Banks do not always have all assets on hand due to the fractional reserve system.
Step-by-step explanation:
Three assets a farmer might have are: a) Current assets, which could include cash, marketable securities, accounts receivable, inventory of crops and livestock, and supplies; d) Fixed assets, such as land, buildings, machinery, and equipment; and other assets that do not fall into the categories b) Debt-to-equity assets or c) Return on equity assets, as these are financial ratios rather than types of assets.
Assets on a bank balance sheet like reserves, bonds, and loans may not actually be in the bank because they represent money that is invested or loaned out to individuals or entities. Banks operate on a fractional reserve system, meaning they keep only a fraction of their deposits on hand and use the rest to make loans or invest.
Different investment strategies and types of financial assets have varying levels of risk and return. Historically, stocks have had a higher average return over time compared to bonds and savings accounts, but they also come with higher risk. The fear that a high-risk investment is especially likely to have low returns is not necessarily true; high risk often comes with the potential for high return, but there is a greater chance of losing money as well.