Investment Psychology: Evaluating Financial Viability of Stocks

Running head: INVESTMENT PSYCHOLOGY
Investment Psychology
Name of the Student:
Name of the University:
Authors Note:

INVESTMENT PSYCHOLOGY
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Table of Contents
Introduction:...............................................................................................................................2
Answer of question 1:................................................................................................................2
Answer of question 2:................................................................................................................2
Answer of question 3:................................................................................................................4
Answer of question 4:................................................................................................................4
Answer of question 5:................................................................................................................6
Conclusion:................................................................................................................................6
Reference and Bibliography:......................................................................................................7

INVESTMENT PSYCHOLOGY
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Introduction:
PepsiCo, Inc, Netflix, Inc, and Tesla Motors Inc is mainly identified as the overall
stocks, which will be evaluated to identify its financial viability and detect investment scope.
In addition, the adequate financial ratios are calculated to identify current position of the
company and the risk involved in Investments.
Answer of question 1:
The companies selected from the portfolio are PepsiCo, Inc, Netflix, Inc, and Tesla
Motors Inc, which would be further research to identify the investment scope in the company.
the selected stocks are relevantly diversified, as the industry of chosen companies ranges
from entertainment, beverages and automobile. The diversification is relatively high, as the
companies does not fall under the same industry, which helps in spreading the risk from
investment. The further research on the company would eventually help in identifying its
current position and future scope, which is essential for continuing investing in the selected
stocks (Lan, Lin and Lin 2015).
Answer of question 2:
Financial ratios are evaluated as follows for the selected companies.
PepsiCo, Inc:
PepsiCo, Inc 2015 2016 2017
Operating Margin 13.25% 15.58% 16.54%
Debt/Equity 2.46 2.67 3.06
Quick Ratio 1.05 1.08 1.29
Gross Margin 54.44% 55.08% 54`69%