Financial report Essay Example | Topics and Well Written Essays - 1000 words - 1

Financial report - Essay Example The process of determining the viable option entailed the application of mathematical techniques and models such as the regression analysis, the LM test and the decision rule to arrive at the most promising and viable investment option. Therefore, 50 countries were used to apply these tests, while using variables such as the GDP per capita, the inflation rates, the consumer price index and the secondary schools to modify the mathematical models and reach at a conclusive decision on the most promising investment opportunity that could be adopted. After the application of the mathematical models and the modification of these models with the above mentioned variable, a decision was reached that investing the 2 billion in secondary school education was more promising than investing the same in the banking sector, where the money could have been used to bail out the banks. Financial decisions are among the most difficult decisions to reach. This because, while making a financial decision, varied considerations should d be made, which call for a greater level of accuracy and precise estimations (Ingersoll, 1987 p47). Additionally, financial decisions are not hundred percent dependable, owing to the large number of factors that affect financial investments and savings. Most significant is the fact that the complexity of making financial decisions is added to, by the nature of the risks involved in the financial sector, where a slight mistake either in prediction or estimation could mean the success or failure of the investments made (Batyrshin, 2007 p23). Therefore, it is extremely important to ensure that financial decisions are reached with the highest degree of precision possible, while at the same time putting into consideration all the factors that determine the viability of the decisions. This financial report presents the considerations that were