Investment Decision

Nature and scope

Abdullah

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.

Definition ..

Investment involves employment of own funds or

borrowed funds on a real or financial asset for a
certain period of time in anticipation of a return in
future.
Investments, on the other hand, is what helps you
to meet your longer term needs and larger
financial goals.
The investor can be an Individual, Government, or
a Corporation.

Objectives

The primary objective of any Investment is to

increase the rate of return and to reduce the risk.
However the other objectives of Investment include:
Return.
Risk.
Liquidity.
Hedge against Inflation.
Safety.

Investment decision..

A determination made by directors or the

management as to how, when, where and how much
capital will be spend on investment opportunities .
The decision often follows research to determine
costs and returns for each option
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Nature and Scope of Investment Decision .

To understand various investment avenues .

To know what are the good investments decisions .

You can take investment decision only after analyzing

entire process of investment that starts with funds
contribution and ends with getting expectations
fulfilled.

A well diversified Portfolio reduces Unsystematic risk

by a large way.

Continues.

Higher the Risk, Higher is the Expected Return.

Higher the time period of investment, lesser is the

uncertainties of Investment.

Investor prefers among securities which yield higher

return for the same risk or lower risk for the same return.

Investment decisions are based on Investment objectives

and Constraints.

Continues..

The investment decision rules allow you to formalize the

process and specify what condition or conditions need
to be met to accept the project.

Investment decisions are made only after ensuring that

the required expectations in terms of returns are
ensured at any cost.