Describe why a manager needs to understand the characteristics and importance of financial markets including risk and efficiency.

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A manager needs to understand the characteristics and importance of financial markets in order to make informed decisions regarding the organization’s investments, borrowing and other capital allocation choices. Financial markets provide an efficient way for companies to access funds that can be used for growth or expansion. Through these markets, managers must also take into account risk associated with potential returns on investment and any additional costs associated with accessing those resources. Additionally, understanding the financial market landscape helps managers when evaluating potential strategic business partnerships as well as choosing where best to allocate resources. Without a solid understanding of financial markets, a manager cannot properly assess their organization’s current position and make informed decisions that positively impact the future of their company.