Proceedings of the 2022 International Conference on mathematical statistics and economic analysis (MSEA 2022)

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How do Investors Make Investment Decision by NPV Rule

Authors
Zhixuan Ouyang1, Yumeng Wan2, *
1Wuhan Textile University, Wuhan, China
2University of California, Irvine, USA
*Corresponding author. Email: yumew15@uci.edu
Corresponding Author
Yumeng Wan
Available Online 29 December 2022.
DOI
10.2991/978-94-6463-042-8_58How to use a DOI?
Keywords
component; NPV rule; COVID-19; bond; investment decision
Abstract

This paper explains the application of the net present value rule to actual investment scenarios. Examples are given of how the NPV rule can be used in actual machine production to help investors decide the best time to sell in a single or repeated investment scenario and thereby maximize the benefits. NPV and yield to maturity are used as reference standards to compare three different types of bonds: coupon bonds, zero-coupon bonds, and perpetual bonds. In addition, the paper discusses the impact of monetary policy changes on NPV in the U.S. and Chinese financial markets, as well as changes in investor income and investment behavior under the influence of the COVID-19 pandemic. The paper also summarizes the irrational factors that influence investors' decisions: for example, the uncertainty of the required information, the complexity of mental activities and the different emotional intelligence of different investors. The study concludes that investors should choose investment options with large NPV values and avoid some irrational factors. Investors should apply a combination of different methods to make investment decisions to complement their strengths and weaknesses.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2022 International Conference on mathematical statistics and economic analysis (MSEA 2022)
Series
Advances in Computer Science Research
Publication Date
29 December 2022
ISBN
10.2991/978-94-6463-042-8_58
ISSN
2352-538X
DOI
10.2991/978-94-6463-042-8_58How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Zhixuan Ouyang
AU  - Yumeng Wan
PY  - 2022
DA  - 2022/12/29
TI  - How do Investors Make Investment Decision by NPV Rule
BT  - Proceedings of the 2022 International Conference on mathematical statistics and economic analysis (MSEA 2022)
PB  - Atlantis Press
SP  - 397
EP  - 405
SN  - 2352-538X
UR  - https://doi.org/10.2991/978-94-6463-042-8_58
DO  - 10.2991/978-94-6463-042-8_58
ID  - Ouyang2022
ER  -