Financial managers and investors do not operate in a vacuum, they make decisions within a large and complex financial en

[answerhappygod]

Financial managers and investors do not operate in a vacuum,they make decisions within a large and complex financialenvironment. This environment includes financial markets andinstitutions, tax and regulatory policies, and the state of theeconomy. The environment both determines the available financialalternatives and affects the outcomes of various decisions. Thus,it is crucial that investors and financial managers have a goodunderstanding of the environment in which they operate.
a) Why is an active financial market essential to theeconomy?
b) How would an economy be worsened off without financialmarkets? (2 Marks)