Question

Question (4): - What do you mean by investment decision process? How is it going to help investor in
making sound investment decision?
OS​

Answer 1

Answer:

The Investment Decision relates to the decision made by the investors or the top level management with respect to the amount of funds to be deployed in the investment opportunities.

Explanation:

$\red{Investment\ Decision:}$ The decision of investing funds in the long term assets is known as Capital Budgeting. Thus, Capital Budgeting is the process of selecting the asset or an investment proposal that will yield returns over a long period.

The first step involved in Capital Budgeting is to select the asset, whether existing or new on the basis of benefits that will be derived from it in the future.

$\red{How\ is\ it\ going\ to\ help\ investor\ in\ making\ { } sound\ investment\ decision?:}$ When making investment decisions, investors can use a bottom-up investment analysis approach or a top-down approach. Bottom-up investment analysis entails analyzing individual stocks for their merits, such as their valuation, management competence, pricing power, and other unique characteristics.