Question 4 Financial managers and investors do not operate in a vacuum, they make decisions within a large and complex f

[answerhappygod]

Question 4 Financial Managers And Investors Do Not Operate In A Vacuum They Make Decisions Within A Large And Complex F 1 (28.37 KiB) Viewed 14 times

Question 4 Financial managers and investors do not operate in a vacuum, they make decisions within a large and complex financial environment. This environment includes financial markets and institutions, tax and regulatory policies, and the state of the economy. The environment both determines the available financial alternatives and affects the outcomes of various decisions. Thus, it is crucial that investors and financial managers have a good understanding of the environment in which they operate. (2 Marks) (2 Marks) a) Why is an active financial market essential to the economy? b) How would an economy be worsened off without financial markets? c) Discuss FOUR (4) different types of financial markets (money market, capital market,derivatives market and foreign exchange market), the instruments that are being traded in each market and the importance of each market to economic stability. (8 Marks) (Total: 12 Marks)