| Title : | Financial literacy and stock market participation: a case of NEPSE | | Material Type: | printed text | | Authors: | Pradeep Khanal, Author | | Pagination: | 97p. | | Size: | GRP/Thesis | | Accompanying material: | 9/B | | Languages : | English | | Descriptors: | Financial literacy
| | Class number: | 374.10 | | Abstract: | From the past few years, it has been seen that Nepalese stock market has reached to unprecedented levels of growth. There are numerous investors who are having their shares in this market. Billions of investments in this market have made it a matter of concern for those aspiring investors as to how this stock market functions. In this regard, the financial literacy of the participants of Nepalese stock market is of due importance. There have been numerous evidences of developed countries in which the financial literacy of the citizens has a major impact on the type and level of economic activity in that country. However, despite of several empirical evidences, financial literacy issues are still unsolved in context of Nepalese stock market although numerous attempts are made each year. So determining the impact of financial literacy in the stock market participation among the investors of NEPSE has always been a crucial issue for every Nepalese investor, individual or institutional. Therefore, this study attempts to identify the relationship between the level of market participation and various determinants of financial literacy such as financial attitude, financial behaviour, financial influence and financial knowledge among the members of Nepalese stock market. The relationship between financial literacy and stock market participation has been widely analyzed. Stock market participation are assumed as outcomes and these are the dependent variables. Financial behaviour, financial attitude, financial influence and financial knowledge are the independent financial literacy variables. The main objective of the study is to examine the relationship between the financial literacy and stock market participation among the members of stock market of Nepal. The other specific objectives are to analyse the financial knowledge, attitude and behaviour of members of NEPSE based on their stock market participation, to examine how adults’ financial knowledge and attitudes are correlated with financial behaviour, to examine the relationship between the participant’s income and financial knowledge, to analyse the correlation between financial attitude and financial knowledge of participants of stock market.
The primary source of data is used to assess the opinion of respondents with respect to the variables used in the research. The survey is based on 205 respondents from different walks of life having a DMAT account. The questions were asked in the form of Likert scale questions, rank questions and multiple choice questions. There are different variables that are measured in a 5 point likert scale. The proxies of financial literacy are financial behaviour, financial attitude, financial influence and financial knowledge. The weighted mean of the each variable were used to examine the relationship of financial literacy and stock market participation of the respondents. For the fact finding of the study primary data was analyzed by using percentage frequency distribution and methods such as correlation analysis and regression analysis.
The result of the study shows that there is a positive relationship between financial literacy and stock market participation among the participants of NEPSE. This means that an enhancement in any of the financial attitude, financial behaviour, financial influence, and financial knowledge leads to increase in stock market participation of respondents. Financial behaviour is the most important factor affecting the market participation of the respondents.
The study found that the respondents have a high level of knowledge in time value of money, money illusion, banking, numeracy, share market, credits, compound interest, inflation, insurance, net worth, followed by least knowledge on taxes. Similarly, it was found that the respondents with different demographic background such as age, gender, marital status, academic qualification, monthly personal income, etc and personality characteristics like financial attitude, financial behaviour, financial influence have different level of financial knowledge. Therefore, it is concluded that stock market participation varies greatly with the changes in dimensions of financial literacy. That is the barometers of financial literacy affect the level and volume of investors’ participation in a stock market.
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Financial literacy and stock market participation: a case of NEPSE [printed text] / Pradeep Khanal, Author . - [s.d.] . - 97p. ; GRP/Thesis + 9/B. Languages : English | Descriptors: | Financial literacy
| | Class number: | 374.10 | | Abstract: | From the past few years, it has been seen that Nepalese stock market has reached to unprecedented levels of growth. There are numerous investors who are having their shares in this market. Billions of investments in this market have made it a matter of concern for those aspiring investors as to how this stock market functions. In this regard, the financial literacy of the participants of Nepalese stock market is of due importance. There have been numerous evidences of developed countries in which the financial literacy of the citizens has a major impact on the type and level of economic activity in that country. However, despite of several empirical evidences, financial literacy issues are still unsolved in context of Nepalese stock market although numerous attempts are made each year. So determining the impact of financial literacy in the stock market participation among the investors of NEPSE has always been a crucial issue for every Nepalese investor, individual or institutional. Therefore, this study attempts to identify the relationship between the level of market participation and various determinants of financial literacy such as financial attitude, financial behaviour, financial influence and financial knowledge among the members of Nepalese stock market. The relationship between financial literacy and stock market participation has been widely analyzed. Stock market participation are assumed as outcomes and these are the dependent variables. Financial behaviour, financial attitude, financial influence and financial knowledge are the independent financial literacy variables. The main objective of the study is to examine the relationship between the financial literacy and stock market participation among the members of stock market of Nepal. The other specific objectives are to analyse the financial knowledge, attitude and behaviour of members of NEPSE based on their stock market participation, to examine how adults’ financial knowledge and attitudes are correlated with financial behaviour, to examine the relationship between the participant’s income and financial knowledge, to analyse the correlation between financial attitude and financial knowledge of participants of stock market.
The primary source of data is used to assess the opinion of respondents with respect to the variables used in the research. The survey is based on 205 respondents from different walks of life having a DMAT account. The questions were asked in the form of Likert scale questions, rank questions and multiple choice questions. There are different variables that are measured in a 5 point likert scale. The proxies of financial literacy are financial behaviour, financial attitude, financial influence and financial knowledge. The weighted mean of the each variable were used to examine the relationship of financial literacy and stock market participation of the respondents. For the fact finding of the study primary data was analyzed by using percentage frequency distribution and methods such as correlation analysis and regression analysis.
The result of the study shows that there is a positive relationship between financial literacy and stock market participation among the participants of NEPSE. This means that an enhancement in any of the financial attitude, financial behaviour, financial influence, and financial knowledge leads to increase in stock market participation of respondents. Financial behaviour is the most important factor affecting the market participation of the respondents.
The study found that the respondents have a high level of knowledge in time value of money, money illusion, banking, numeracy, share market, credits, compound interest, inflation, insurance, net worth, followed by least knowledge on taxes. Similarly, it was found that the respondents with different demographic background such as age, gender, marital status, academic qualification, monthly personal income, etc and personality characteristics like financial attitude, financial behaviour, financial influence have different level of financial knowledge. Therefore, it is concluded that stock market participation varies greatly with the changes in dimensions of financial literacy. That is the barometers of financial literacy affect the level and volume of investors’ participation in a stock market.
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