Question

explain the following statement" can we run a financial institution without the help of economic theories and their understanding"?​

Answer 1

Answer:

I don't know... .... .... ... ...

Answer 2

Economic theories and their understanding plays a significant role in framework of of the financial institution. Most of the economic theories form the background of the  financial techniques, methods and policies of the financial institutions

Explanation:

• There are many economic theories that form the framework and the building blocks for the financial institutions. They help the investors to analyse and optimize the different portfolios through various diverse methods and effective methods of pricing the assets
• There are various pricing models that are based on the economic theories  and they help in identifying the risk factor involved. It gives choice to the investor to choose between various portfolios which would give them effective returns with minimum risks.
• The economic theories and their understanding help with  improvements in the financial sector and gives a theoretical approach on the theory of money along with effective methods of analyzing the economy. The economic theories help with methods of utilizing the money and credits according to the needs of the economy

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