Does Investors’ Demographics And Selected Profile Factors Influence Financial Risk Tolerance?

Abstract

In this study, researcher attempted to study the association of the Demographic and Investor profile of investors with the one of the important psychological variable financial risk tolerance using chi square test. Further by using the correspondence analysis/crosstabs, researcher attempted to gain more insight in to the association. Finally the extent of influence of the Demographic and investor profile variables on the Financial risk tolerance cluster was studied using the canonical correlation. The research design followed in this study is the descriptive research design. Using the Multi stage random sampling technique, the primary data for the study was collected from 470 respondents (investors) in the State of Tamilnadu, India. The results of this study confirmed that there exists significant association between all the Demographic and Investor profile variables with the financial risk tolerance. Also the results further revealed that variables such as gender, age, marital status, type of family, dependents, religion, occupation, number of earning members and amount spent for recreation/entertainment exert significantly strong influence on the financial risk tolerance cluster.