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    Investment Meaning, Nature and Scope

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    The document discusses investment decision making, including the objectives to improve skills in portfolio management and get better returns with less risk. It describes the nature and scope of investment decisions, including understanding different decision rules, categories of rules, and ensuring expectations of returns are met. The decision process involves understanding good rule characteristics, calculating returns based on conditions, using constraints to eliminate alternatives, and following rules to accept or reject opportunities.

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    Investment Meaning, Nature and Scope

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    bhytgdfdfdfd
    41K views8 pages
    The document discusses investment decision making, including the objectives to improve skills in portfolio management and get better returns with less risk. It describes the nature and scope of investment decisions, including understanding different decision rules, categories of rules, and ensuring expectations of returns are met. The decision process involves understanding good rule characteristics, calculating returns based on conditions, using constraints to eliminate alternatives, and following rules to accept or reject opportunities.

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    The document discusses investment decision making, including the objectives to improve skills in portfolio management and get better returns with less risk. It describes the nature and scope of investment decisions, including understanding different decision rules, categories of rules, and ensuring expectations of returns are met. The decision process involves understanding good rule characteristics, calculating returns based on conditions, using constraints to eliminate alternatives, and following rules to accept or reject opportunities.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    41K views8 pages

    Investment Meaning, Nature and Scope

    Uploaded by

    bhytgdfdfdfd
    The document discusses investment decision making, including the objectives to improve skills in portfolio management and get better returns with less risk. It describes the nature and scope of investment decisions, including understanding different decision rules, categories of rules, and ensuring expectations of returns are met. The decision process involves understanding good rule characteristics, calculating returns based on conditions, using constraints to eliminate alternatives, and following rules to accept or reject opportunities.

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    Investment Meaning, Nature and

    Scope: Decision Process


    Investment
     In finance, the purchase of a financial product or other
    item of value with an expectation of favorable future
    returns. In general terms, investment means the use
    money in the hope of making more money.
    Objective of SAPM
     To improve decision-making skills in management of
    investment through better understanding of modern
    theories on portfolio management and functioning of
    capital market.
     To get better return on portfolio with lesser risk
    Nature and Scope of Investment Decision

     To understand various investment decision rules.


     To know what are the good investments decisions
    rules.
     To know the category of investment decision rules.
     You can take investment decision only after
    analyzing entire process of investment that starts with
    funds contribution and ends with getting expectations
    fulfilled.
    Continue…
     The investment decision rules allow you to formalize
    the process and specify what condition or conditions
    need to be met to accept the project.
     You will take decision only after ensuring that the
    required expectations in terms of returns are ensured at
    any cost.
    Decision Process
     Understand characteristics of good investment decision
    rules.
     Decide basis of calculation of return based on required
    condition.
     Use constrain to eliminate investment alternatives.
     Follow decision rules to accept or reject investment
    opportunity.
    Characteristics of Good Investment Decision Rules
     It should maintain a fair balance between allowing
    manager to analyze the project and bring-in subjective
    assessment into the decision and ensuring that different
    projects are judged consistently.
     It must maximize the value of the firm and minimize
    risk.
     It should work across a variety of investments.
    Category of Investment Decision Rules
     Accounting Income-based decision rule
     Return on Capital
     Return on Equity
     Cash flow-based decision rule
     Cash Return on capital
     Cash Return on Equity

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