AN EMPIRICAL INVESTIGATION FOR DETERMINING OF THE RELATION BETWEEN PERSONAL FINANCIAL RISK TOLERANCE AND DEMOGRAPHIC CHARACTERISTIC

To evaluate the effect of demographic variables, delay discounting and dysfunctional personality traits on financial risk tolerance (FRT), 281 community-dwelling adults were administered the Italian translations of the Risk-Tolerance Scale (RTS), Monetary Choice Questionnaire, Probability Discounting Questionnaire, and Personality Inventory for DSM-5-Short Form (PID-5-SF) self-report questionnaires through an online platform. Hierarchical robust regression results showed that the linear combination of demographic variables (gender and active worker status), delay discounting measures and selected PID-5-SF trait scale scores (i.e., Attention Seeking and Risk Taking) explained roughly 39% of the RTS total score. As a whole, our findings underscore the role of demographic characteristics, dysfunctional personality traits and delay discounting in FRT expression. As a result, FRT is likely to represent the linear combination of several factors that should be assessed in order to understand FRT and prevent erroneous choices among lay investors.

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Personality, risk tolerance and social network use: an exploratory study

Managerial Finance ◽

10.1108/mf-05-2015-0159 ◽

2016 ◽

Vol 42 (6) ◽

pp. 536-552 ◽

Cited By ~ 2

Author(s):

Shaista Wasiuzzaman ◽

Siavash Edalat

Keyword(s):

Social Networks ◽

Social Network ◽

Online Social Networks ◽

Financial Risk ◽

Ordinary Least Squares ◽

Risk Tolerance ◽

Network Activity ◽

Least Squares Regression ◽

Content Type ◽

Financial Risk Tolerance

Purpose – The vast amount of information available via online social networks (OSN) makes it a very good avenue for understanding human behavior. One of the human characteristics of interest to financial practitioners is an individual’s financial risk tolerance. The purpose of this paper is to look at the relationship between an individual’s OSN behavior and his/her financial risk tolerance. Design/methodology/approach – The study uses data collected from a sample of 220 university students and the backward variables selection ordinary least squares regression analysis technique to achieve its objective. Findings – The results of the study find that the frequency of logging on to social network sites indicates an individual who has higher financial risk tolerance. Additionally, the increasing use of social networks for social connection is found to be associated with lower financial risk tolerance. The results are mostly consistent when the sample is split based on prior financial knowledge. Originality/value – To the authors’ knowledge this is the first study which documents the possibility of understanding an individual’s financial risk tolerance via his/her social network activity. This provides investment/financial consultants with more avenues for gathering information in order to understand their current or potential clients hence providing better services.

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Impact of Behavioral Biases in Financial Risk Tolerance Ability of Mutual Fund Investors

Tobacco Regulatory Science ◽

10.18001/trs.7.5.1.45 ◽

2021 ◽

Vol 7 (5) ◽

pp. 2748-2765

Author(s):

Nidhi Jain ◽

Bikrant Kesari

Keyword(s):

Mutual Fund ◽

Financial Risk ◽

Positive Impact ◽

Investment Decision ◽

Central India ◽

Risk Tolerance ◽

Behavioral Biases ◽

Asset Class ◽

Level Of Knowledge ◽

Financial Risk Tolerance

Objective: The Behavioral bias is the term that deals with the investors’ psychology about their investment decision with their investment expertise. Every individual is biased, according to standard economic theory by his behavior and experiences which are rational. Methods: This research seeks to segregate mutual fund holders into various groups (persons and professionals) based on Behavioral biases and then investigates whether these Behavioral biases are influencing the level of knowledge of investors and the financial risk tolerance of certain mutual funds. Statistical tools compare investors characteristics and analyse how Behavioral biases are associated. Results: The factors analysed are financial circumstance, Type of Investors, Asset class preference, Time Horizon and Purpose of Investment. The primary information was gathered from 250 Central India mutual fund investors dependent on Judgment sampling. CFA, Correlation, MANOVA and Regression. Conclusions: Findings shows the effect of the behavior bias has positive impact on mutual fund investor awareness and financial risk tolerance.

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Nonlinear linkages between financial risk tolerance and demographic characteristics

Applied Economics Letters ◽

10.1080/13504850701381123 ◽

2009 ◽

Vol 16 (13) ◽

pp. 1329-1332 ◽

Cited By ~ 22

Author(s):

Robert Faff ◽

Terrence Hallahan ◽

Michael McKenzie

Keyword(s):

Financial Risk ◽

Demographic Characteristics ◽

Risk Tolerance ◽

Financial Risk Tolerance

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The Effect of Financial Risk Tolerance and Family Income on Entrepreneurial Intention in Higher Education Sector of District Swabi

Global Economics Review ◽

10.31703/ger.2021(vi-i).03 ◽

2021 ◽

Vol VI (I) ◽

pp. 24-37

Author(s):

Rehan Zeb ◽

Naveed Hussain Shah ◽

Muhammad Arif

Keyword(s):

Higher Education ◽

Sample Size ◽

Financial Risk ◽

Family Income ◽

Entrepreneurial Intention ◽

Risk Tolerance ◽

Education Sector ◽

Public And Private ◽

Financial Risk Tolerance ◽

The Relationship

The study examines the effect of family income (FI) and financial risk tolerance (FRT) on entrepreneurial intention in students of Universities of the Higher Education Sector located in district Swabi. This is an explanatory and co relational study carrying a sample size of 330 out of the total of all 501 students from public and private Universities in Swabi. Financial determinants are prominent aspects of the study contributing to entrepreneurial intention. The study has established the relationship between FI and FRT on EI of universities of the Higher Education Sector located in district Swabi. The study is a contribution to the rare work on the relationship between financial determinants and entrepreneurial intention. The study revealed that FI and FRT significantly affect EI, whereas the order of contribution of these determinants on EI are evident their coefficients are FRT and FI.

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Retail Investors’ Financial Risk Tolerance and Risk-taking Behaviour: The Role of Psychological Factors

FIIB Business Review ◽

10.1177/23197145211058274 ◽

2021 ◽

pp. 231971452110582

Author(s):

Pragati Hemrajani ◽

Rajni ◽

Rahul Dhiman

Keyword(s):

Risk Taking ◽

Psychological Factors ◽

Structural Equation ◽

Financial Risk ◽

Risk Tolerance ◽

Individual Investors ◽

Financial Advisors ◽

Research Model ◽

Financial Risk Tolerance

The aim of this article is to look at how two psychological factors affect financial risk tolerance (FRT) and financial risk-taking behaviour (FRB) of individual investors. The study also investigates the role of FRT in mediating the relationship between psychological factors and FRB. A standardized questionnaire was used to collect the information. For the study, a total of 303 completed questionnaires were used. The proposed research model was validated and assessed using partial least squares structural equation modelling. The findings revealed some important experiences. Emotional intelligence and impulsiveness have a significant relationship with both FRT and FRB, according to the results. The findings also support FRT’s position as a mediating factor in the proposed research model. The results emphasize the importance of psychological factors in determining an individual’s FRT and FRB. FRT is a complex mechanism that entails more than just psychological considerations. As a result, further research is needed to decide which additional factors financial advisors can use to increase the explained variance in FRT inequalities.

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