Application of Fuzzy AHP in Priority Based Selection of Financial Indices: A Perspective for Investors

Abstract

By providing important indicators, financial indices help investors make educated judgements regarding their assets, much like vital sign monitors for the financial markets. The best way for investors to keep up with the market and make strategic adjustments is to keep an eye on these indexes. Researching the most important financial indexes for making educated investing decisions is, thus, quite relevant. Finding the most essential financial indices from an investing standpoint and assigning a weight to each of those indexes are the main goals of this research. A weighted score is derived by combining four financial indices in a Multi-Criteria Decision-Making (MCDM) technique. These objectives are then pursued. Triangular Fuzzy Numbers (TFNs) and the Fuzzy Analytic Hierarchy Process (F-AHP) are used to determine the weights of criteria in this technique. Using these methods together, the research hopes to provide a thorough analysis of the role that different financial indexes have in informing investment choices. This study emphasizes the paramount importance of considering the Price Earning to Growth (PEG) ratio when making investment decisions, followed by the Debt Equity Ratio. Price to Book Value and Dividend Yield, while relevant, carry comparatively less weightage in the overall assessment. Investors are advised to use these insights as a guideline in their financial analysis and decision-making processes.

Keywords

• financial indices
• priority selection
• multi-criteria decision-making (mcdm)
• triangular fuzzy number (tfn)
• fuzzy analytic hierarchy process (f-ahp)
• c44
• e44
• m21
• g17