COMPARATIVE ANALYSIS OF TRADITIONAL AND MODERN FINANCIAL MODELS IN INVESTMENT DECISION MAKING

Mayank Bajpai; Audhesh Tripathi; CMA Niraj Prasad

doi:10.29121/shodhkosh.v4.i2.2023.2219

Authors

Mayank Bajpai Research Scholar, Department of Commerce,University of Lucknow,Babuganj, Hasanganj, Lucknow, Uttar Pradesh 226007
Audhesh Tripathi Professor -Department of Commerce, Dean (CDC), University of Lucknow, Babuganj, Hasanganj, Lucknow, Uttar Pradesh 226007
CMA Niraj Prasad Research Scholar, Department of Commerce,University of Lucknow, Babuganj, Hasanganj, Lucknow, Uttar Pradesh 226007

DOI:

https://doi.org/10.29121/shodhkosh.v4.i2.2023.2219

Keywords:

Investment Decision-Making, CAPM, DCF Analysis, Machine Learning, Behavioral Finance, Financial Models, Quantitative Analysis

Abstract [English]

This research paper investigates the comparative effectiveness of traditional financial models, such as the Capital Asset Pricing Model (CAPM) and Discounted Cash Flow (DCF) analysis, versus modern models, including Machine Learning algorithms and Behavioral Finance models, in investment decision-making. The study aims to determine whether modern financial models provide more accurate and reliable investment predictions, especially under volatile market conditions, and how the integration of these models influences overall investment performance.A quantitative methodology was employed, utilizing a survey of 100 investment professionals with varying levels of experience. The data collected was analyzed through statistical tests, including Independent Samples T-Test, Paired Samples T-Test, Multiple Regression Analysis, Chi-Square Test, and Pearson Correlation. The findings reveal that modern financial models are perceived as more reliable and effective in predicting investment outcomes compared to traditional models. Additionally, the integration of modern and traditional models enhances investment decision-making performance. The study also highlights a significant association between the level of experience and model preference, with more experienced professionals favoring traditional models.These results have important implications for investment professionals, suggesting that the adoption of modern financial models can lead to improved investment outcomes, particularly when combined with traditional approaches. Future research could explore the long-term performance implications of these models in different economic environments.

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