This study aimed to unleash the role of macroeconomic factors on asset pricing among financial institutions. The study acknowledges that whilst the portfolio diversification’s conceptualization is critical to achievement of investment goals and risk management, a diversified portfolio across asset classes has no guaranteed diversified risk exposures. The study adopted a descriptive design to provide a plan of study that permits accurate assessment of cause and effect relationships between independent and dependent variables. The target population encompassed all the available literature on the online web as pertaining macroeconomic factors and asset prices of financial institutions. Using key word characters, the search initially identified 58 references and after a tentative scrutiny, 30 references were selected in a random sampling manner in order to give the birth of this discussion paper. This study relied wholly on secondary data and thus a survey of documented data was applied in acquisition of prerequisite information, literature and background of this research topic through desktop research. From the empirical review it was established that big movements in stock prices of financial institutions do not line up with movements in long-term interest rates over the same period. The study also acknowledges that macroeconomic factors affect asset prices and that asset prices have significant influence on foreign exchange rates exposure on financial institutions.