The distinguish feature of economic capital (as opposed to financial capital, like money) is that it is

Well, economic capital is the estimated amount or value of money needed to cover possible losses or bankruptcy from unexpected risk. A firm's economic capital number can also be seen as a measurement of solvency.

Explanation:

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letmeanswer letmeanswer · Answer 2 · 2019-10-12T13:25:53+02:00

Answer:

Economic capital is the amount of money used by a firm to protect itself from risk, consequences and losses incurred from unexpected risk. It is a

measure of solvency status of a firm.

Explanation:

Economic capital is considered as a provision for a firm to safeguard itself from risks arising from business, legal changes, economic reasons and market fluctuations. The operational and market risks of a firm is determined by economic capital. The expected risk is often converted into capital and this gives a clear picture about a firm’s solvency.

Financial capital is often expressed in monetary terms. The two components of financial capital are debt and equity. A financial status of a firm is determined by the debt to equity ratio.