Zulfiqar Hasan

A financial environment is a part of an economy with the major players being firms, investors, and markets.

Financial environment includes bond markets, forex markets, stock markets, commodity markets, OTC markets, Real estate markets and cash or spot markets etc.

The financial environment is composed of three key components: (1) financial managers, (2) financial markets, and (3) investors (including creditors

Essentially, this sector can represent a large part of a well-developed economy as individuals who retain private property have the ability to grow their capital.

Firms are any business that offer goods or services to consumers.  Investors are individuals or businesses that place capital into businesses for financial returns.

Markets represent the financial environment that makes this all possible.