Final answer:
Raul's home, car, investments, and personal assets represent his tangible assets, which are items of value he owns outright. If he has no bank loans on his home, his equity is the total market value of the property. These assets contribute to his net worth and potential rate of return.
Step-by-step explanation:
Raul Cruz owns a variety of assets, including a home worth $250,000, a car worth $15,000, investments worth $600,000, and other personal assets worth $25,000. These items represent Raul's tangible assets, which are physical items of value that he owns outright. In the context of this question, if Raul owns his home outright without any bank loans, his equity in the home would be the full market value of the home - similarly to the example of Freda, whose house is worth $250,000 with no bank debt, resulting in total equity of $250,000.
Similarly, the other assets like his car, investments, and personal items contribute to his overall net worth since they are owned free and clear. These tangible assets can provide a rate of return either through appreciation of value, as in the case of real estate, or through investment yields, like stocks or other financial instruments.