Describe why a manager needs to understand the characteristics and importance of financial markets including their liquidity, competitiveness, and efficiency.

Ashford bus 650 managerial finance – complete course, latest 2013

It is important for a manager to understand the characteristics and importance of financial markets, including their liquidity, competitiveness, and efficiency in order to effectively manage their resources. Liquidity refers to how easily assets can be converted into cash without significantly affecting the price; this is important since it allows managers to quickly access funds when needed. Competitiveness centers around how much competition exists between buyers and sellers in the market; this is beneficial because it helps ensure that organizations are getting fair prices for their investments. Efficiency speaks to how efficiently resources are allocated within the market which can help maximize profits while minimizing costs.

In addition, having an understanding of these various characteristics will help managers make more informed decisions about where/when/how to invest company funds as well as determine which strategies may be most effective for achieving long-term goals. This knowledge also benefits businesses by allowing them to track performance trends over time so they can adjust investments accordingly if necessary. Finally, understanding these dynamics can provide insight into any potential risks associated with certain investments or strategies so that managers can better navigate turbulent waters during times of economic uncertainty.

Overall, there are many benefits to having a firm grasp on the dynamics of financial markets including liquidity, competitiveness, and efficiency. By utilizing this information strategically managers are able to make sound investment decisions that ultimately lead towards greater profitability over time.