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Enhancing investment decisions in Indian stock market through MCDM approach

Author

Listed:
  • Arup Mitra
  • Arun Kumar Jalan
  • Prabir Biswas
  • Sayan Gupta

Abstract

The purpose of this paper is to compare a set of Indian stocks listed in the Morgan Stanley Capital International (MSCI-114) Index. The present paper considers the fundamental performance of the stocks as a basis for comparison. A number of financial ratios have been used as criteria to compare the performance of the stocks. The underlying objective is to formulate a portfolio for investment decision-making. Since the decision-making is based on the performance of the stocks subject to multiple criteria, the current work presents a multiple-criteria decision-making (MCDM) framework. Priority of the criteria is based on objective information, and this study uses the inter-criteria correlation method for deriving the weight. It is compared and ranked as per their performance using a compromise solution-based model that trades off the criteria effect with considerable reliability and stability. Finally, the mean-variance (MV) model is incorporated for identifying adverse risks and optimising the portfolio.

Suggested Citation

  • Arup Mitra & Arun Kumar Jalan & Prabir Biswas & Sayan Gupta, 2025. "Enhancing investment decisions in Indian stock market through MCDM approach," International Journal of Indian Culture and Business Management, Inderscience Enterprises Ltd, vol. 35(3), pages 291-327.
    • Handle: RePEc:ids:ijicbm:v:35:y:2025:i:3:p:291-327
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