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Investor awareness, perceived risk attitudes, and investor behavior in Nepalese stock market / Chandan, Soni
Title : Investor awareness, perceived risk attitudes, and investor behavior in Nepalese stock market Material Type: printed text Authors: Chandan, Soni, Author Publication Date: 2019 Pagination: 114p. Size: GRP/Thesis Accompanying material: 1st/Gmba Languages : English Abstract: The inception of the stock market has been provided investment opportunities for individual and institutional investors in Nepal. Stock market is considered as one of the best ways to increase funds. Stock markets are essential for economic growth as they insure the flow of resources to the most productive investment opportunities. Stock markets are more than a place to trade securities; they operate as a facilitator between savers and users of capital by means of pooling of funds, sharing risk, and transferring wealth. Stock market plays a crucial role in the financial system. This allows business to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market.
Decision making is part of routine life; people have to take variety of decisions, large or small, economic or non-economic. Decision making is the mental or cognitive process that results in the selection of a course of action among several alternative situations. Investor behavior on the stock market is often seen to be a factor of cognition, emotion and social influences. And the need to incorporate psychology attempts to explain how perception of investors and their reaction to uncertainties affect the investment decision there by influencing price movements. As capital market mobilizes the scattered resources and channels them in productive sector, capital market is an effective instrument of expanding productive capacities of the country.
Although there is an abundant academic literature on global stock market, especially in the developed countries, but one finds little literature on the Nepali stock market. The study on investors’ awareness, perceived risk attitudes and investors’ behavior is comparatively less in Nepal as compared to other developed countries. The trading in share market is not just affected by the information but also by other factors such as psychological factors, education and income. It is seen that investors are more reliable and attached with a particular type of investment alternatives. The prominent issues in the stock market might be the fluctuating stock market indices, the capital centric trading system, limited numbers of dominant investors, and their influences in stock market.
The major objective of this study is to analysis of investment behaviour of individual investors of stock market. The specific objectives of the study are to analyze the most influential factors that affect the investment decision, assess the impact of social learning, financial awareness, risk taking behavior and overconfidence on investing behavior of Nepalese investors, find out the major sources of basic knowledge about how to invest in stock and evaluate the opinion of the Nepalese stock investors on investment alternative and decision making.
This study is based on primary sources of data. The primary sources of data have been used to assess the opinion of respondents with respect to investor awareness, perceived risk attitudes and investor behavior in case of Nepalese capital market. The stock investors are selected from different brokers’ floors in Kathmandu and personally known investor friends and relatives. The questionnaire survey has been carried out to record the opinions and perceptions with respect to individual investors’ decision making in Nepalese stock market. The structure questionnaires were distributed among the different investors. The questionnaire contains total 40 questions of mixed type option such as personal information, closed-end multiple choice and five-point Likert scale items. Thus, there are altogether 198 respondents on which the entire study depends. In order to meet the objective of the study, percentage, frequency distribution and correlation was employed to examine the behavioral biases influencing portfolio investment decision making in Nepal stock exchange.
The result shows that investors’ behavior is positively and significantly related with social learning, financial awareness, risk taking behavior and overconfidence in Nepalese stock investors. It indicates that higher the social learning, financial awareness, risk taking behavior and overconfidence, higher would be the involvement in trading in Nepalese stock market. The study also concludes that demographic factors like age, gender, material status, education, occupation and level of income have influence individual behavior towards investing decision in stock market. The regression result shows that the beta coefficients for social learning, financial awareness, risk taking behavior and overconfidence are positive with the investors investing behavior in Nepalese stock market
Investor awareness, perceived risk attitudes, and investor behavior in Nepalese stock market [printed text] / Chandan, Soni, Author . - 2019 . - 114p. ; GRP/Thesis + 1st/Gmba.
Languages : English
Abstract: The inception of the stock market has been provided investment opportunities for individual and institutional investors in Nepal. Stock market is considered as one of the best ways to increase funds. Stock markets are essential for economic growth as they insure the flow of resources to the most productive investment opportunities. Stock markets are more than a place to trade securities; they operate as a facilitator between savers and users of capital by means of pooling of funds, sharing risk, and transferring wealth. Stock market plays a crucial role in the financial system. This allows business to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market.
Decision making is part of routine life; people have to take variety of decisions, large or small, economic or non-economic. Decision making is the mental or cognitive process that results in the selection of a course of action among several alternative situations. Investor behavior on the stock market is often seen to be a factor of cognition, emotion and social influences. And the need to incorporate psychology attempts to explain how perception of investors and their reaction to uncertainties affect the investment decision there by influencing price movements. As capital market mobilizes the scattered resources and channels them in productive sector, capital market is an effective instrument of expanding productive capacities of the country.
Although there is an abundant academic literature on global stock market, especially in the developed countries, but one finds little literature on the Nepali stock market. The study on investors’ awareness, perceived risk attitudes and investors’ behavior is comparatively less in Nepal as compared to other developed countries. The trading in share market is not just affected by the information but also by other factors such as psychological factors, education and income. It is seen that investors are more reliable and attached with a particular type of investment alternatives. The prominent issues in the stock market might be the fluctuating stock market indices, the capital centric trading system, limited numbers of dominant investors, and their influences in stock market.
The major objective of this study is to analysis of investment behaviour of individual investors of stock market. The specific objectives of the study are to analyze the most influential factors that affect the investment decision, assess the impact of social learning, financial awareness, risk taking behavior and overconfidence on investing behavior of Nepalese investors, find out the major sources of basic knowledge about how to invest in stock and evaluate the opinion of the Nepalese stock investors on investment alternative and decision making.
This study is based on primary sources of data. The primary sources of data have been used to assess the opinion of respondents with respect to investor awareness, perceived risk attitudes and investor behavior in case of Nepalese capital market. The stock investors are selected from different brokers’ floors in Kathmandu and personally known investor friends and relatives. The questionnaire survey has been carried out to record the opinions and perceptions with respect to individual investors’ decision making in Nepalese stock market. The structure questionnaires were distributed among the different investors. The questionnaire contains total 40 questions of mixed type option such as personal information, closed-end multiple choice and five-point Likert scale items. Thus, there are altogether 198 respondents on which the entire study depends. In order to meet the objective of the study, percentage, frequency distribution and correlation was employed to examine the behavioral biases influencing portfolio investment decision making in Nepal stock exchange.
The result shows that investors’ behavior is positively and significantly related with social learning, financial awareness, risk taking behavior and overconfidence in Nepalese stock investors. It indicates that higher the social learning, financial awareness, risk taking behavior and overconfidence, higher would be the involvement in trading in Nepalese stock market. The study also concludes that demographic factors like age, gender, material status, education, occupation and level of income have influence individual behavior towards investing decision in stock market. The regression result shows that the beta coefficients for social learning, financial awareness, risk taking behavior and overconfidence are positive with the investors investing behavior in Nepalese stock market
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Barcode Call number Media type Location Section Status 632/D CHA Thesis/Dissertation Uniglobe Library Philosophy & Psychology Available