Critical Investment Decision Making : Selecting The Best Option For Client X

1586 Words7 Pages
Critical Investment Decision-Making By Ketan Kumar Selecting the best option for client X I. Abstract The main principal objective of this paper is to demonstrate the diversity and the changing capability of certain investment options. The goal is to show our client the best option out of the elected organizations through identifying the periodical performance of each one. Upon examination of each asset, it will become clear to which asset our client will be able to invest to gain maximum revenue when invested. Investment decision-making includes the process of identifying, evaluating and selecting among investment options that are likely to have positive effect on the investor’s capital or in other words,…show more content…
The chosen options to be analysed include AGL Energy, serving as a share, Dexus Property Group, serving as a property trust and Aurora Dividend Income Trust, serving as a managed fund. More specifically, the objective of this research essay is to identify which specified asset type would be more reliable to invest in, in order to gain a successful outcome of potential investment options. This will be identified through the study and analysis of financial ratios. III. Analysis In order to undergo the procedure of calculating the performance of the clients chosen assets, historical financial performance will be needed to assist to calculate how these organisations have delivered, and will deliver returns to their shareholders. Below will be the use of several financial ratios to analyse the figures of specific investment options selected by the client. These financial ratios include the rate of return, average return, risk rate and the Sharpe ratio. Firstly, the rate of return ratio (return on investment) is a measure of performance used to calculate the efficiency of an investment. To calculate the rate of return, the return of the investment is divided by the cost of the investment. Rate of Return=((Gain from investment-Cost of investment))/(Cost of investment) Secondly, the average rate of return is another way of measuring an investment’s profitability. It is calculated by taking total revenue over the period of
Open Document