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Toxic asset is a financial asset that is now worth far much less than it used to be, and is more likely to continue losing value, and there is no longer an active market for the Asset.
I may give you an example of such Toxic Asset from the real life, in in Pharmaceutical industry there is a well known technology call Fermentation, for producing a product name 7ACA it should pass with 3 main process one of them is Fermentation.
latest 2003 this process replaced as a result of a genetic engineering new existing technology all over the world.
the plant (Asset) of this process and all re-actors became useless and of sure it's prices fall down dramatically.
This also applicable for securities.
Toxic asset is a popular term for certain financial assets whose value has fallen significantly and for which there is no longer a functioning market, so that such assets cannot be sold at a price satisfactory to the holder.
Financial term to an asset whose value is fallen down continuously and significantly till reaching zero market value and also in the same time become no function value for the organization
Toxic Asset is an asset which was based on previous technologies which were not that advance and not the price of that asset has fallen drastically in market and it has no use too.
A Big and practical example is Propeller planes and Jet Engine...others include:
Single piston vehicle engine Vs Four Stoke..
Carbon Fiber Vs Sometime (Steel Equipment)
Toxic Assets are the assets that being less than it`s book value or by another word the assets the became less than the price that were being purchased. Could be because any this like old fashion, past models, ...etc
Toxic assets are financial assets that are now worth considerably less than they used to be, will likely continue falling in value, and for which the market has frozen, i.e. there is no longer a functioning market for them.
A toxic Asset is the asset that does not worth it's real value any more.
Toxic assets are assets that becomes illiquid when its secondary market disappears. Toxic assets cannot be sold, as they are often guaranteed to lose money.
Toxic asset means investment risk was originally significantly undervalued by the holder
The definition of "toxic assets'
One of the assets become illiquid secondary market when it disappears. They can not be sold toxic assets, and are often guaranteed to lose money. The term "toxic assets" was coined in the 2008/09 financial crisis, in terms of mortgage-backed securities, collateralized debt obligations and bonds default swaps Alaitma
