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Comprehensive Project Report On A Study on Moderation of Financial literacy

on the Relationship between Individual Factors and Risky Investment
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 Comprehensive Project Report
On
A Study on Moderation of Financial literacy on the Relationship
between Individual Factors and Risky Investment Intention
Submitted to

Sal Institute of Management

Institute code: 807

Under the Guidance of Dhara Padiya

(Designation: Google scholar)

In Partial Fulfilment of Requirement of the Award of the

Degree of Master of Business Administration

Gujarat Technological University, Ahmedabad

Prepared by:

Krupa Patadiya (208070592101)

Manushi Bhavsar (208070592044)

MBA (Semester IV)

May 2022
1
 STUDENT’S DECLARATION

I hereby declare that the Comprehensive Project Report titled On a Study on Moderation of
financial literacy on the Relationship Between Individual Factors and Risky Investment
Intention is a result of my own work and my gratitude to other work publications, references,
if any, have been appropriately acknowledged. If I am found guilty of copying from any other
report or published information and showing as my original work, or extending plagiarism
limit, I understand that I shall be liable and punishable by the university, which may
include ‘Fail’ in examination or any other punishment that university may decide.

Enrollment No: Name Signature

208070592101 Patadiya Krupa

208070592044 Manushi Bhavsar

2
 CERTIFICATE OF EXAMINER

This is to certify that project work embodied in this report entitled “Moderation of financial
literacy on the Relationship Between Individual Factors and Risky Investment Intention” was
carried out by Krupa Patadiya (208070592101) and Manushi Bhavsar (208070592044) of SAL
INSTITUTE OF MANAGEMENT, INSTITUTE CODE:807 The report is approved / not
approved. Comments of External Examiner:

This report is for the partial fulfilment of the requirement of the award of the degree of
Master of Business Administration offered by Gujarat Technological University.
_______________________________ (Examiner’s Sign)

Name of Examiner:

External Examiner’s Institute Name:

External Examiner’s Institute Code:

Date: 16/6/2022

Place: Ahmedabad

3
 PREFACE

As a part of the MBA curriculum and in order to gain practical knowledge in the field of
management, we are required to make a report on study of “Moderation of financial literacy
on the Relationship Between Individual Factors and Risky Investment Intention” The basic
objective behind doing this project report is to understand the effects of independent factors
such as financial literacy, advanced financial literacy, locus of control and risk awareness on
risky investment intention.
In this project report we have included the various concept, effects and implications regarding
the risky investment intention. This is not only about the report, this help us to get some
practical knowledge towards the field with some theoretical knowledge & concepts.
Doing this project report this helped me to enhance our knowledge regarding the factors
affecting risky investment intention. The knowledge and experience I gained through this
report will be so much helpful in my future.

4
PLAGIARISM REPORT

5
 ACKNOWLEDGEMENT

I would like to articulate my profound gratitude and indebtedness to my report guide Dhara
Padiya Who has always been a constant motivation and guiding factor throughout the thesis
time in and out as well. It has been a great pleasure for me to get an opportunity to work under
her and complete the project successfully.
We express our profound gratitude to Dr. Viral Bhatt, principal for his outstanding cooperation
to provide all required facilities and proper guidance.

6
 EXCLUSIVE SUMMARY

A part of the syllabus in the second year MBA student we are required to prepare a project
report on the Comprehensive Project. The aim of this project is the practical application of the
managerial knowledge and skill learnt during the course work of this program.
The report presents the facts, findings and recommendations resulting from a study on
behaviour and investment pattern of investor for different investment avenues with special
reference to Ahmedabad city. The scope of the project report is limited to the study on the basis
of the primary data collected by structured questionnaire and the secondary data collected from
information received from written and published documents, websites.

7
 TABLE OF CONTENTS

No. Chapter Page no

1. Introduction 10

1.1 Overview of Financial Sector and current 11

perspective
1.2 History and Evaluation 14

1.3 Evaluation of financial sector 15

1.3.1 Types of investment 16

1.4 Current scenario of Financial sector 21

1.5 SWOT Analysis 23

1.6 Importance of Financial sector 25

1.7 Research question 26

2. Literature review 27

2.1 Review of Literature 28

2.2 Conceptual Development Based on LR 31

2.3 Research Gap 32

8
 2.4 Measurement Model 33

3. Research Methodology 34

3.1 6W’s 35

3.2 Research Objectives 35

3.3 Data gathering process 36

3.4 Demographic variable 37

3.5 Sampling Design 38

3.6 Data Collection 39

4. Data Analysis 40

5. Findings, Suggestions and Recommendations 75

6. Conclusion 79

7. Bibliography 80

Questionnaire 84

9
 CHAPTER - 1
INTRODUCTION

10
1.1 Overview of Financial Sector

Understanding monetary action has turned into a steady need for the researchers, despite the
fact that they have changed their focal points as per standards. From the microeconomic (i.e.,
interest for their items) and macroeconomic (Bhatt, 2020) (i.e., reserve funds or ventures)
perspectives, monetary mediators and policymakers have likewise been engaged with this
issue. Reverberating with the traditional money worldview, many examinations has zeroed in
on the segment or financial variables in making sense of the monetary way of behaving.

In accordance with the classical finance paradigm, numerous studies have focused on
socioeconomic or demographic factors to explain financial behaviour (Yusof, 2013)This focus
has made sense under the ceteris paribus assumptions (Woodyard, 2011)(i.e., everyone is
rational, the sum of deviations from rational conduct is zero, and the probabilities are
stochastic). However, the new behavioural finance paradigm takes a different tack when
looking at financial behaviour. Despite the It has been required to adjust researchers' lenses in
accordance with new extended assumptions, according to the proponents of this paradigm, who
assert that they do not undermine the fundamentals of classical finance theory (Banker, 2020)
(i.e., everyone is not rational, the deviations are systematic and the probabilities are subjective).
This has inspired financial researchers to talk about fundamental psychological ideas in
financial contexts. The focus has since turned to psychological or attitudinal elements, which
could include any subjectivity.

are a few examples of studies that provide more information on the relationship between risk-
taking attitude and general or financial behaviour? A risk-averse person is typically expected
to avoid engaging in any risky conduct. Actually, the relationship is not as easy-going as it
seems. For instance, (al. W. e., 2011)shown that people are not always risk-seekers or risk-
averse, suggesting that risk taking depends on the relevant domain. However, we anticipate
that a person's overall aversion to risk would be consistent with that person's aversion to
financial risk. (HiralBorikar, 2020)There must be another element, nevertheless, that
Distinguish this obvious relationship between them. Therefore, financial literacy proposes to
avoid risk in general, but to make some people who take financial risk different from those
who avoid risk in both general and financial contexts.

11
Simply put, our research contributes to the literature in three ways. First, it puts both some
individual factors and financial literacy (Roszkowski et al., 2005)(a powerful resource in
financial decision-making) in the context of financial behaviour. Risk aversion generally
reflects a person's general attitude towards risk taking, but the locus of control represents a
person's lasting characteristics. (Prajapati, 2019) Second, it captures both the direct and indirect
or systematic impacts (i.e., mitigation effects) of financial literacy on the link between these
factors and risky investment intent. Third, our results on financial literacy highlight a new
research question as to whether another type of indirect effect (i.e., mitigated mediation) may
occur.

For this purpose, make existing literature available and use it to justify the hypothesis. The
following shows how to determine the variables and how to sample and analyse them. Finally,
we discuss the theoretical and practical implications, limitations, and new areas of our research.

(Bhatt H. R.)The rationale is 0, the chances are stochastic and the quantity of deviations from
sensible way of behaving. That is a fair accentuation. The advanced monetary hypothesis of
conduct, however, checks monetary way of behaving out. Albeit the allies of this worldview
contend that the standards of traditional funds are not invalidated. In this manner researchers
are urged to discuss significant standards of brain science. (Sheth, 2019) Then the accentuation
on the psychological or attitudinal factors that might incorporate subjectivity has been changed.
Monetary education was simultaneously another interesting individuality.

We know as a matter of fact, we have hardly any insight into its impact on unsafe ventures.
Moreover, no record has been produced of the roundabout results of monetary abstract work
on monetary way of behaving (Nagvadia) (for example as a vector mediator) after an emphasis
on its immediate impact in current writing. The relationship between risk-taking and general
or monetary direct (for example Weber) Milliman and Milliman 1997 has now been gotten to
the next level. A gamble unwilling individual is regularly expected to cease from going to
hazardous lengths. The relationship isn't that direct, as a general rule.

The monetary organizations and banks are orchestrating different classes at schools,
universities and in rustic regions to build the monetary education of individuals (Joshi).

12
Furthermore, in the wake of acquiring monetary education they will quite often face more
challenge.

(Bhatt & V, 2020)Through this it very well may be seen that assuming the monetary
proficiency of individuals increment they will generally face more challenge.

Anyway, (Bhatt & Trivedi) it is additionally seen that the gamble taking limit of people is lined
up with the endanger they take in everyday existence concerning different elements.

Current perspective

Financial companies and banks hold a number of workshops in rural and college settings to
increase people's financial literacy. (Prajapati & Bhatt, 2019)And after gaining financial
literacy, individuals seem to take more chances. This demonstrates that people are more
vulnerable as their knowledge of finance grows.

It has also been observed that the risk that individuals confront is inversely correlated with the
risk they assume with regard to other factors in general.

13
1.2 History of the Financial Sector

The history of the Indian financial sector and what significant transformations occurred in
Indian Financial Sector liberalisation policies from 1991 to 1992 (Bhatt & M.). The monetary
administrations area in India, which represents 6% of the country's GDP, is developing quickly.
Albeit the area comprises of business banks, advancement finance organizations, nonbanking
monetary organizations, insurance agency, cooperatives, common assets, and the new
"instalment banks," it is overwhelmed by banks, (Bhatt V. , 2021) which holds more than 60%
offer. The Reserve Bank of India (RBI) is the summit bank of the nation, controlling
movements of every sort in the monetary area. Business banks incorporate public area and
private area banks and are under the administrative oversight of the RBI. Advancement finance
foundations incorporate modern and agribusiness banks.

Non-banking finance organizations (NBFC) give advances, (Bhatt V. &., 2015) buy stocks and
debentures, and proposition renting, employ buy, and protection administrations. Insurance
agency work in both public and private areas and are constrained by the Insurance Regulatory
and Development Authority (IRDA). India likewise has a dynamic capital market with stocks
trades constrained by the Securities and Exchange Board of India (SEBI).

As per "India in Business," a site of the Union Government, India’s financial area resources
was valued at $1.8 trillion in the 2014-15 monetary years. As per a report by KPMG-CII, India's
financial area is headed to turning into the fifth biggest on the planet by 2020. (Bhatt V. &.,
2018) The country's life coverage area is the greatest on the planet, and the market size is
supposed to contact about $400 billion by 2020.

The resources of the shared asset industry are valued at $190 billion. The benefits corpus
reserve is projected to record $1 trillion by 2025. Changes to put the monetary administrations
industry and the economy on the road to success incorporate measures to make finance
accessible to medium, little, and miniature businesses. India once had an intensely government-
ruled monetary administrations industry, (Bhatt V. &., 2019) and most administrations were
given by nationalized banks. Monetary area changes were started in 1991 determined to speed
up financial development. Before very long, industry and administration areas were opened up
for unfamiliar direct venture. The changes finished the predominance of the public area and
diminished direct government control on modern speculations. Monetary area changes in India
have further developed asset mobilisations and allotment.

14
1.3 Evaluation of the Financial Sector:
The economy of a nation is portrayed by investment funds. (Vora & & Bhatt, 2020) The cash
is the motor for the advancement of the nation by putting resources into the various choices
accessible for the populace. The Indian monetary scene likewise offers financial backers a lot
of roads. While most certainly not the most elevated or most profound of the world's business
sectors, a typical individual will make fair reserve funds ventures. Banks, the beginning of
India's monetary designs, are thought of as the most secure of all choices. (Bhatt V. G.) As a
general rule, the banks in India play had a significant impact in rustic uprising, advanced as the
means for social development. Nonetheless, they have been the best speculation for a typical
resident.

Be that as it may, today, the nation's financing cost framework goes south, in accordance with
worldwide patterns. (V & D, 2020) The profits have dropped fundamentally as of late with
banks giving just 9% in their super durable stores for one year. Furthermore, inflationary
circumstances on the lookout and the economy don't acquire cash. Expansion is developing to
practically 8% now and again, so how much the set aside cash falls instead of rises. This
fundamentally offers the valuable chance to benefit from bank stores. Like banks, India has a
wide organization of mail centres. They give monetary help in the country.

Financial exchanges offer the chance to participate in a high gamble game with significant
yields. While each of the choices referenced above will create a potential return far higher than
10-11 percent, there is no doubt that the gamble is the best. (Bhatt H. V.)Yet, once more, as
you expect better yields, the common principle of more gamble and instability is right. As
alluring as it could be, however, individuals are to a great extent questionable how the monetary
market functions, and how hard-acquired investment funds might be undermined.

The test of creating predominant returns at equivalent gamble limits is difficult without a doubt
for somebody not ready to get a handle on the capital market. (Bhatt B. B.).This is the picture
of equal assets. Shared reserves are generally effective money management.

Instruments for people with normal venture objectives to pool their assets and spend likewise.
Every unit in any framework is the extent of the unit holder's pool (financial backer).
Speculation esteem appreciation or decline is communicated in the net resource esteem (NAV)

15
of the plan under question, as declared occasionally by the asset. Common asset plans are
regulated by every resource organization (AMC) (Vora H. J., 2020).

A few worldwide assets like Alliance and Templeton are additionally working autonomously
in India. A lot more global Mutual Fund goliath are supposed to come into Indian business
sectors sooner rather than later.

1.3.1 Types of Investment:

Investment situation like a banian tree that develops step by step by adding new roads with
exceptional attributes to draw financial backers. (Bhatt V. &., 2018) The different ways an
individual can spend his cash are the roads of venture. It likewise called elective money
management or speculation plans. Different instruments for arranging speculation channels are
accessible. (V., 2021) The underneath is a portion of the cycles. Actual investment instruments
like Interest in unmistakable or fixed products, including establishments and gear, engine
vehicles, ships and designs, is actual speculation. The main actual consumptions are as per the
following:

16
1. Real Estate:
Immovable properties like land and anything for all time appended to them like structures are
basically known as persistent. Genuine property is characterized as the option to appoint title
to land as against individual or portable property, (Shah, et al., 2019) while title might be
saved for individual property. It is reasonable to expect that genuine property gives a return
yield that is higher than long haul roads like stores. Immobilization ventures depend generally
on the dangers and options of speculation.
2. Gold and Silver:
Gold and silver were viewed as a wellspring of speculation for a really long time. Their
security against expansion is thought of as the most noteworthy. The interest in country and
semi-metropolitan regions is a sort of one. (Sheth & Bhatt, 2009) In addition, rather than
simple gold, purchasers like to put resources into adornments. Gold has forever been utilized
as cash and was, as of not long ago, an overall standard of money related choices in the
monetary areas or countries.
3. Financial Investment:
This includes the utilization of assets as protections to acquire additional income or value the
value of the likely speculation. Resources that are the objective of speculation can go from
protected to dangerous. It has been parted in two sections:
A) Marketable Investments (Negotiable Securities):

(Patel, 2018) These financial securities that are easily marketable and converted into cash in
short time. Such investments are also known as transferable investments. It includes two kinds
of securities, such as

a) Variable Income Securities:

Some marketable securities yield income which varying time to time is. Such securities are
called as variable Income Securities.

b) Equity shares:

17
These securities carry more risk than investing in debt instruments. There is no assured return
but when we invest in a share company, we become an owner of the company to the extent of
the capital invested.

c) Fixed Income securities:

These are the securities which yield certain fixed income to a regular interval of time. Securities
which come under this category as follows:

d) Bonds:

Bond is a long-term instrument that promises to pay a fixed annual sum as interest for a
specified period of time. Generally, Debentures and Bonds are one and the same. Americans
called ‘Bond’, European called ‘Debentures’. In India, generally debt issued by government
known as Bond, if it issued by private, known as Debenture.

e) Government securities:

The security issued by central, state and quasi government agencies are known as government
securities or gilt-edged securities. As government guaranteed security is a claim on the
government, it is a secured financial instrument, which guarantees the income and capital. The
rate of interest on these securities is relatively lower because of their high liquidity and safety.

A. NON-MARKETABLE INVESTMNTS (NON-NEGOTIABLE SECURITIES)

There are the financial securities which can’t easily marketable and converted into cash in short
time. It includes following

• Deposits:

Deposits earn fixed rate of return. Even though, these are non-marketable instruments. Popular
types of deposits are:

1) Bank deposit:

18
It is the simplest avenue open for the investors. Investor has to open an account and deposit
money.

2) Post Office Deposit:

The post office provides, as the business bank, conceded store and an arrangement of month to
month income. The store should be duplicated by Rs 50. The loan costs change from a one-
year store of 8.20 to a 5-year store of 8.50 per cent. Before a half year no evacuation is allowed.
Half yearly advances are charged, yet every year. These stores ought to be ensured for security
purposes.

➢ Tax-Sheltered Saving Scheme:

These are the schemes where tax benefits also offered on savings. Such schemes are:

1) Employee Provident Fund Scheme:

This is the most common way for workers to save the money. In this arrangement, each
employee is rewarded with a different account and the balance by deducting them from the
employee's pay. The employee with retirement positions contributes to this fund, as well as the
boss. According to other provisions, the staff can add more money to the budget, but the share
of the contractor is based on some basis for the minimum wage.

2) Public Provident Fund Scheme:

It is an Indian instrument to save cum charges. It is additionally a monetary reserve funds

choice for those of them without a proper benefit collaborate. Any part of the Indian State Bank
or its assistant or assigned parts of other nationalized banks can open a PPF account. It's a
money growth strategy for quite a long time. PPF is absolved from personal assessment under
sec 88 by a financing cost of 12% every year. This framework can be utilized by people and
Hindu unified families.

3) National Saving Certificate(NSC):

This framework is given by Postman, where Rs500, 1000, 5000 and 10000 certifications are
given. This is a personal citizen saving arrangement. The consumption in the authentication is

19
liable to burden avoidance as per Article 80c of the Revenue Tax Act. Under that plan, no
withdrawal is permitted and no development derivation is approved.

4) National Saving Scheme (NSS):

NSS is a 4-year scheme that provides a tax discount under Section 88 of the Revenue Tax Act
of 1961. No premature cancellation facilities are offered except in case of the death of the
system holder. Individuals and Hindu families are qualified at their selected post office to open
the NSS account.

➢ LIFE INSURANCE:

It is an arrangement to pay the extraordinary protected against the incident a measure of cash.
It is an agreement. Generally, the agreement considers instalment of the total at unpredictable
durations or when a terrible passing occurs upon the arrival of development or on assigned
dates. LIC has executed various plans to address the issues of various residents. The program
at present gave is: life strategy, convertible entire life strategy, strategy on gift, and so forth.

➢ MUTUAL FUNDS:

Shared reserves have as of late acquired universality all over the planet; common supports bear
benefits through head insurance, capital appreciation and interest or profits. Under the common
asset plot a little cash financial backer can participate in interests in huge organizations that,
due to his little speculation, are generally inaccessible to him. Shared promotes gather, put
resources into and produce revenue pay and profits for little proprietors, put it in government
and other corporate protections. Financial backers share benefits and capital appreciation
through a particular determination of offers in a different portfolio, which covers expansive
sensitivities.

20
1.4 CURRENT SCENARIO OF FINANCIAL SERVICES:

• India's PE/VC speculation were at US$ 77 billion out of 2021, which was 62% higher
than 2020.
• In 2021, Proses obtained Indian instalments giant Bill Desk for US$ 4.7 billion.
• In September 2021, eight Indian banks reported that they are carrying out or going to
carry out a framework called 'Record Aggregator' to empower purchasers to combine all
their monetary information in one spot.
• In September 2021, Piramal Group closed an instalment of Rs. 34,250 crores (US$ 4.7
billion) to get Dewan Housing Finance Corporation (DHFL).
• Advanced instalment stages for provincial India:
• In July, Dvara Kshatriya Garmin Financial Services Pvt Ltd., a NBFC working in distant
provincial areas of India, obtained 'Transact Now' advanced stage, a beginning stage tech
fire up that offers computerized monetary types of assistance to India's unbanked and
underserved populace.
• In August 2021, Neokred, an open financial stack that conveys arranged variants of
issuance in the instalment biological system, cooperated with Virenxia, a supplier of
coordinated and manageable answers for rustic change and advancement, to send off 'The
Kizan Card,' a unique instalment card for Indian ranchers.
• In May 2021, the Reserve Bank of India (RBI) without a doubt authorisation to Eroute
Technologies to work as a prepaid instalment instruments (PPI) organization.
• In February 2021, the Reserve Bank of India (RBI) cleared the Rs. 34,250 crores (US$
4.7 billion) obtaining of Dewan Housing Finance Corporation (DHFL) by the Piramal
Group.

21
• In January 2021, Sundaram Asset Management Company declared the securing of
Principal Asset Management for Rs. 338.53 crore (US$ 46.78 million).
• In January 2021, the National Stock Exchange (NSE) sent off subordinates on the Nifty
Financial Service Index. This assistance record is probably going to give foundations and
retail financial backers greater adaptability to deal with their funds.
• In September 2021, Unified Payments Interface (UPI) recorded 3.65 billion exchanges
worth Rs. 6.5 trillion (US$ 86.63 billion).
• The quantity of exchanges through prompt instalment administration (IMPS) arrived at
384.88 million (by volume) and added up to Rs.3.18 trillion (US$ 43.19 billion) in
September 2021.
• In August 2021, Unified Payments Interface (UPI) recorded 3.55 billion exchanges worth
Rs.6.39 lakh crore (US$ 86.00 billion).
• The quantity of exchanges through quick instalment administration (IMPS) arrived at
377.94 million (by volume) and added up to Rs.3.18 trillion (US$ 42.85 billion) in August
2021.

22
1.5 SWOT ANALYSIS:

• There is no new enormous players or specialty players in the monetary administrations

industry, however new autonomous specialists as well as discounters, banks, protection
firms and credit associations must be made.
• To anticipate the appearance on the location of any significant standard market or specialty
players. In late 10 years, there has been quick development in the quantity of sub-
enterprises that create inside the monetary administrations area.
• There are not many interferences to permission to quick development in each sub-industry.

1) STREGNTH:
• Over the most recent 20 years, it has advanced from not being charged for moving to
exchanges up to 300 per cent of its year creation, bonus and expense instalment instalments
and stipends.
• These enormous organizations currently need to pay their experts to keep their wages,
compensations and advantages on the front of their positions. It is called motivators for
maintenance.
• The guides fall into this gathering are common asset firms, flexible investments, different
showrooms in coordinated exchanges, autonomous record directors, business organizations
and public organizations.
• Mutual assets, business offices, abundance administrators might approach the various
organizations yet these associations need to pay a modest quantity to get on the picked list.

2) WEAKNESS:
• Clients give every one of the insights concerning the actual market in the ongoing
circumstance. This arranging influence is likewise for the client.

23
• The web has continued and clients today approach speedier, less expensive, and more clear
examination and realities than guides are given by the actual area.
• As in the event that it was adequate, different data sources will currently be gotten to by
the financial backer.
• Assuming the expert will just incorporate the organizations' edible examination to their
singular financial backers.

3) OPPORTUNITIES:
• Monetary administrations firms take off neighbourhood shops each other selling year
checks changing from 200% to 300% of the monetary specialist.
• On the lookout, the most reduced cost provider can't contend; the guide is all the more
passed on to the client in the opposition for evaluating.
• At the organization level, client care on the mass market, as opposed to mark, is scarcely
to be recognized from one another.

4) THREATS:
• Where financial backers get more extravagant isn't Financial Services Companies. It is
the region where rich individuals are hoping to save their capital.
• The age of abundance has forever been by the development of organizations; extended
drowsy restrained speculations; karma with corporate investment opportunities; property
markets and other non-monetary business sectors.
• Abundance Transfer can be taken care of by insurance agency, and they do a great deal.
• Abundance Preservation by banks, trust organizations, extra security organizations.

24
1.6 IMPORTANCE OF FINANCIAL SECTOR:

a) FACILITATES TRANSACTIONS:

Monetary administrations work with the smooth working of exchanges in an economy.

Different monetary instruments, for example, charge cards, Visas, check, bill of trades and a
lot more help individuals in doing instalments.

b) ENSURES LIQUIDITY:

These services ensure proper liquidity by facilitating free movement of funds among people.
Financial services enable people to easily acquire the required funds through credit cards or
loan facilities.

c) MOBILIZES SAVINGS:

Association of individuals' reserve funds is one more significant pretended by monetary

administrations. It unites the individuals who have abundance ideal lying assets and one who
need assets for putting into useful means.

d) RISK MINIMIZATION:

Financial reduce the effect of risk to customers through diversification. Insurance policies
offered by companies provide protection to people against various losses.

e) ALLOCATES CAPITAL FUNDS:

It empowers individuals to distribute their asset into productive sources. Monetary

administrations give different speculation choices to clients like shared reserves, stocks, saving
and fixed stores which can create pay for them.

f) GENERATES EMPLOYEMENT:

Financial services help in setting out greater work open doors in a country. There are huge
quantities of individuals who are related with monetary establishments selling these

25
administrations. Such foundations by means of selling monetary administrations produce their
pay and pay compensation to their representatives.

g) ECONOMIC GROWTH:

These administrations empower the general advancement of all areas of the economy.
Monetary administrations give adequate assets to all key areas that is an essential area, auxiliary
area and tertiary area. It brings about a fair development of the entire economy.

1.7 RESEARCH QUESTIONS:

➢ How/why locus of control influence venture expectation?

➢ Which are the variables that influence most for speculation goal?
➢ Which are the broadly acknowledged speculation roads?
➢ How much gamble factor influences the venture expectation?
➢ What absence of monetary education can mean for dangerous venture aim?

26
 CHAPTER-2
LITERATURE REVIEW

27
2.1 LITURATURE REVIEW

Risk Awareness

Risk aversion in general is an attitude that reflects the extent to which an individual generally
avoids taking risks in their life. According to the theory of reasoned action (Fishbein, 1977)and
planned behaviour (Ajzen, 1991),subjective attitudes and norms identify the probability of
occurrence of a behaviour by influencing this behavioural intention. This attitude can play a
big role in why people opt for certain products or avoid others. Regarding risk taking, which is
considered as one of the entrepreneurial characteristics, there are two approaches in the
managerial literature. The first approach is that risk-taking is a personality trait, while the
second is that risk-taking is a mental state that changes according to circumstances (McCarty,
2000). In a study by (Schoemaker, 1993)it is indicated that an individual's intrinsic attitude
toward risk may differ from his or her observed risk-taking. To explain this divergence, the
author suggests different problem structuring, information processing modes, value functions,
beliefs, and context and process factors of individuals. Furthermore, (al., 2000)prove that the
level of risk taking of individuals is specific to a domain. In other words, people are not
systematically risk averse or risk seeking in all areas. This attitude varies by content area. This
study has similarities to that of (Weingart, 1995).They explain the relationship between risk
perception and risky decision making in the way that risk perception mediates the relationship
between problem framing, outcome history, and risky decision making. However, many studies
have focused on the relationship between risk taking and risk behaviours. In these studies, a
risk-averse individual is generally expected to also refrain from risky behaviours.

H1: Risk averseness in general has a negative impact on risky investment intention.

Locus of Control

According to (Rotter, 1996),the effect of a reinforcement on a behaviour could show a

divergence between individuals in the degree to which an individual discerns that this reward
comes from his behaviour. Consequently, if individuals perceive reinforcement or reward as a
result of their actions, these individuals are considered to have an internal locus of control.
However, if individuals perceive reinforcement or reward as a result of external forces such as
luck, chance, fate, these individuals are said to have an external locus of control. From there,
to predict the nature of the learning processes, it is assumed that this variable is significant and
shows constant differences between individuals. In this context, the internal and external locus

28
of control as a personality variable has been used in many studies. These results allow us to
discuss the locus of control as an individual factor in the context of behavioural finance. In
their study that integrates demographic, socioeconomic, and psychological factors into one
model, (Joo, 2000)conclude that locus of control, financial knowledge, and gender are
predictors of financial risk tolerance. Furthermore, compared to financial knowledge and
gender, locus of control contributes more to explain financial risk tolerance. Furthermore,
(Morris, 2005),show that the locus of control has a direct and indirect effect on responsible
financial behaviour. Regarding the indirect effect, the locus of control moderates the
relationship between financial knowledge and responsible financial behaviour. Therefore,
someone with a high internal locus of control would benefit more from her financial knowledge
over her financial management.

H2: locus of control has a negative impact on risky investment intention.

Financial Literacy

Financial education can be defined as the degree to which a person knows the basic financial
principles concepts and operation of financial markets. (Servon, 2008) describe the literacy as
a person's ability to understand and use financial concepts. Financial education has been a
phenomenon of interest in the recent past as everything that people know about financially
helps a lot to explain the financial decision or behaviour. With the advent of market
deregulation (Klein, 2009), and the new social security reforms around the world (al. V. R.,
2011), people they have been more active and responsible agents in their financial planning.
Therefore, these developments have highlighted the importance of financial education. For this
reason, this phenomenon has been widely reviewed by researchers in the literature. Most
research indicates that people have a lack of financial education that would help them make
sound financial decisions. (Mitchell L. , 2007) indicate that financially illiterate households are
less likely to plan for retirement and accumulate wealth. Furthermore, (al. V. R., 2011) provide
evidence of financial illiteracy as a reason for improper participation in the action. In other
words, people with low financial literacy are less likely to participate. in the stock market what
is known as a risk investment in the literature. These people lack what is necessary. financial
knowledge that could inspire them to take advantage of financial markets and portfolio
diversification ( (Jappelli S. &., 2008),.

H3: Financial literacy has a positive impact on risky investment intention.

29
Advanced Financial Literacy

“In general terms, a moderator is a qualitative or quantitative variable that affects the direction
and/or strength of the relationship between an independent or predictor variable and a
dependent variable or criterion”. In our study, we predict that the relationship between
individual characteristics and risky investment intention diversify according to the level of
financial education of individuals. Financial knowledge is an important asset resources for
people to make investments, we hope that financial education will alter the strength of these
relations. As we mentioned earlier, people who avoid risk are generally less likely to make a
risky investment. intention. However, there may be differences between an individual's
intrinsic risk attitudes and observed risk-taking. due to various factors such as the context and
process factors and information processing (Schoemaker., 1993),. As a result, more financially
informed people are less likely to avoid making risky investments, even though they tend to
generally avoid taking more risks in their lives. More financial knowledge would change your
risks perception of the investment shaping the problem structuring or processing of the
information of the investment in question decision. Or, an individual's level of risk aversion
would change in the financial realm as (al. W. e., 2002) suggest.

H4: Financial literacy moderates the relationship between risk averseness in general and
risky investment intention.

30
2.2 CONCEPTUAL MODEL BASED ON LITERATURE REVIEW:

On the basis of literature review, the present study aims to put on effects of 4 factors.ie.
Financial literacy advanced financial literacy, locus of control and risk awareness on risky
investment intention among various investors of different age groups. As we can see that there
is lack of financial literacy in India when It comes to investment intention. Due to this, it is
seen that there is avoidance of risk as investors lack proper financial knowledge.

In addition to this as India is a patriarchal society man take to make investment decision. Due
to this woman are more ignorant about the investment aspects. However, it is seen that working
women tend to make their own investment decisions after proper analysis.

The risk appetite of the entrepreneurs is more than others. Due to which they tend to take more
risk. However due to lack of proper analysis, they also fail to take reasonable risk.

Some research also focuses that risk awareness in addition to financial literacy should be
included in understanding financial behaviour, since financial behaviour is a significant aspect
for risky investment intention.

Financial Literacy

Advance Financial
Literacy
Risk
Investment
Intention
Locus of control

Risk Awareness

31
2.3 RESEARCH GAP

Scientist has taken 17 writing survey for concentrate deliberately. Under this review scientist
has principally faced challenge awareness, locus of control and monetary education into
thought. Be that as it may, the high level monetary education isn't thought about. So, in the
current writing survey, high level monetary education is additionally thought about so that its
impact can be distinguished on the hazardous speculation expectation.

32
2.4 MEASUREMENT MODEL:

Advanced Locus of
Financial control
literacy

Financial Risk
literacy Risky awarenes
investment s
intention

33
 CHAPTER: 3
RESEARCH
METHODOLOGY

34
3.1 SIX W’S:
➢ WHAT?
Examine that how much of different factors affect risky investment intention and up to what
extent.
➢ WHY?
To know factors, influence risky investment intention.
➢ WHERE?
This study includes investors across the Ahmedabad city.
➢ WHOM?
This study is for the investor who are investing in different type of avenue like; Stock Market,
Mutual Fund, Fixed Deposit, Bond, Gold, PPF, Real Estate.
➢ WHICH?
This study only includes investors which located in Ahmedabad city.
➢ HOW?
In this study data collection is with the help of questionnaire.

3.2 RESEARCH OBJECTIVES:

➢ Primary Objectives:
Primary objectives is to understand the effects of independent factors such as financial
literacy, advanced financial literacy, locus of control and risk awareness on risky investment
intentions.

➢ Secondary Objectives:
• To identify the type of financial products preferred by investors.
• To understand relationship between financial literacy level and the risk-taking capacity
of individual.
• To understand how locus of control and financial behaviour of investors affect the risk-
taking ability of the investors.

35
3.3 DATA GATHERING PROCESS:
➢ Descriptive Data:
In this research we select the Descriptive Cross-Sectional research design because it was most
suitable. Research design shows how data are collected and analysed. The sampling
technique used for this survey is non- probability convenience sampling method because
samples are collected on personal judgement.

➢ Cross-Sectional:
In this research the data has been presented in graphs, pie-charts, line charts, etc.

36
 3.4 DEMOGRAPHIC VARIABLES:

Demographic Variables

Education Occupation
Age Annual Marital
Income Status
18-30
Student
31-45
Private Employee Married
>45
Business Unmarried
Professional
Under
Others 0-250000
graduation
Graduation 250000-500000

Post-Graduation 500000-1000000
Others 1000000 & above

37
 3.5 SAMPLING DESIGN:
➢ Sampling Unit:
• Ahmedabad city
➢ Sampling Element:
• Investors of different age group.
➢ Sampling Method:
• Convenient Sampling Method
➢ Sample Size:
• 469

38
3.6 DATA COLLECTION:
➢ Primary data:
• Questionnaires
➢ Secondary data:
• Reports
• Literature Review
• Websites

39
 CHAPTER: 4
DATA ANALYSIS &
INTERPRETATION

40
❖ Frequency Table;
➢ Age:
Frequency Percent Valid Cumulative
Percent Percent
18-30 84 21.5 21.8 21.8
31-45 256 66.5 66.5 88.3
>45 45 11.7 11.7 100.0
Total 385 100.0 100.0 -

Occupation

23%

45% student
private employee
business

32%

Interpretation:
Above chart indicate that the frequency of respondents that is out of 385
respondent’s maximum respondents are from the group of 31-45 years which are
256 and minimum respondents are from the age of greater than 45 years which
is 45.

41
 ➢ Education:
Frequency Percent Valid Cumulative
Percent Percent
Under Graduate 7 1.8 1.8 1.8
Graduate 187 48.6 48.6 50.4
Post Graduate 187 48.6 48.6 99.0
Others 4 1.0 1.0 100.0
Total 385 100.0 100.0

Occupation

16%
31% student
private employee
22% business
professional

31%

Interpretation:
From the above chart it is observed that Graduate and Post Graduate are highest while
categories in others are lowest.

42
 ➢ Occupation:

Frequency Percent Valid Cumulative

Percent Percent
Student 58 15.1 15.1 15.1
Private 80 20.8 20.8 35.8
Employee
Business 111 28.8 28.8 64.7
Professional 111 28.8 28.8 93.5
others 25 6.5 6.5 100.0
Total 385 100.0 100.0

Occupation

6%
15%
student

29% private employee

21% business
professional
others

29%

Interpretation:
Above chart indicates that the frequency of occupation, out of 385 respondents Business and
Professional are highest with the frequency of 111 and others component is the lowest with
frequency of 25.

43
 ➢ Marital status:
Frequency Percent Valid Cumulative
Percent Percent
Married 191 49.6 49.6 49.6
Unmarried 194 50.4 50.4 100.0
Total 385 100.0 100.0 -

annual income

45% 0-250000

55% 250000-500000

Interpretation:
From the above chart, it is observed that frequency of unmarried that is 194 respondents is
more than the frequency of married that is 191.

44
➢ Annual Income:
Frequency Percent Valid Cumulati
Percent ve Percent
0-250000 81 21.0 21.0 21.0
250000-500000 100 26.0 26.0 47.0
500000-1000000 179 46.5 46.5 93.5
>1000000 25 6.5 6.5 100.0
Total 385 100.0 100.0

annual income

6%
21%
0-250000
250000-500000
500000-1000000
47%
26% >1000000

Interpretation:
From the above chart it is observed that annual income level with 500000-1000000 is the
highest while annual income with >1000000 is the lowest.

45
➢ Reliability Statistics:

Item-Total Statistics
Scale Mean if Scale Variance Corrected Cronbach's
Item Deleted if Item Deleted Item-Total Alpha if Item
Correlation Deleted
BL1 14.0753 12.513 .782 .929

BL2 14.0026 14.273 .819 .918

BL3 14.0519 13.206 .864 .908

BL4 14.0935 13.585 .832 .914

BL5 14.0623 13.923 .838 .914

Item-Total Statistics
Scale Mean if Scale Corrected Cronbach's
Item Deleted Variance if Item-Total Alpha if Item
Item Deleted Correlation Deleted
AL1 10.7273 4.433 .608 .780

AL2 10.7221 4.899 .600 .781

AL3 10.6805 4.489 .633 .766

AL4 10.8364 4.601 .701 .736

Item-Total Statistics
Scale Mean if Scale Corrected Cronbach's
Item Deleted Variance if Item-Total Alpha if Item
Item Deleted Correlation Deleted
RI1 14.1948 7.949 .608 .863

RI2 14.3013 8.123 .650 .853

46
 RI3 14.3584 6.923 .758 .826

RI4 14.4416 7.768 .733 .834

RI5 14.3714 7.146 .737 .831

Item-Total Statistics
Scale Mean if Scale Variance Corrected Cronbach's
Item Deleted if Item Deleted Item-Total Alpha if Item
Correlation Deleted
LC1 8.3870 8.030 .520 .851

LC2 7.8364 6.882 .759 .740

LC3 7.7584 8.340 .589 .818

LC4 7.8260 6.837 .794 .724

RA4 11.0052 4.437 .703 .807

Interpretation:

To check the scale dependability of the develops for inward consistency we have utilized
Cronbach’s Alpha. Scores of α > 0.50 is satisfactory and α > 0.70 is alluring. We have for
scores above 0.70 for every one of the develops demonstrating interior consistency of the
builds.

47
 ➢ Crosstab:

Chi-Square Tests
Value Df Asymptotic
Significance (2-
sided)
Pearson Chi- 26.491a 6 .000
Square
Likelihood 24.219 6 .000
Ratio
Linear-by- 13.864 1 .000
Linear
Association
N of Valid Cases 385

Directional Measures
value Asymptotic Approximate
standard Error T
Ordinal by somers’d symmetric .166 .046 3.529

ordinal
.195 .054 3.529

Income

Dependent
Age .145 .041 3.529

Dependent

H0: There is no significance difference between particular income and age regarding risky investment
intention.

48
H1: There is significance difference between particular income and age regarding risky investment
intention.
Here significance value is 0.00 which is less than 0.05, it means that hypothesis is accepted.

Directional Measures
Approximate
significance
Ordinal by somers’d symmetric .000

ordinal
Income .000

Dependent
Age .000

Dependent

H0: There is no significance difference between particular income and age regarding risky
investment intention.

49
H1: There is significance difference between particular income and age regarding risky
investment intention.

Here significance value is 0.00 which is less than 0.05, it means that hypothesis is accepted.

Case Processing Summary

Cases
Valid Missing Total
N Percent N Percent N Percent
Edu * occ 385 100.0% 0 0.0% 385 100.0%

Edu * occ Crosstabulation

count

Occ
Edu Student Private Business Professional Others
Employment
UNDER 5 1 1 0 0
GRADUATE
GRADUATE 32 43 61 32 19

POST 20 35 49 77 6
GRADUATE
OTHER 1 1 0 2 0

Total 58 80 111 111 25

50
 Edu * occ Crosstabulation
count

Edu Total
UNDER GRADUATE 7

GRADUATE 187

POST GRADUATE 187

OTHER 4

Total 385

➢ Chi-square tests:

Value Df Asymptotic
Significance
(2-sided)

Pearson 51.088a 12 .000

Chi-Square
Likelihood 48.593 12 .000
Ratio
Linear-by- 10.045 1 .002
Linear
Association
N of Valid Cases 385

51
 Directional measures
value Asymptotic Approximate
standard Error T
Ordinal by somers’d .166 .046 3.529

symmetric
ordinal
Edu .195 .054 3.529

Dependent
Occ .145 .041 3.529

Dependent

Directional Measures
Approximate
Significance
Ordinal by Ordinal somers’d symmetric .001

Edu Dependent .001

occ Dependent .001

Symmetric Measures
Value Approximate
significance
Nominal by phi .364 .000
Nominal
Cramer’s V .210 .000
Total 385

52
H0: There is no significance difference between particular education and occupation regarding
risky investment intention.
H1: There is significance difference between particular education and occupation regarding
risky investment intention.
Here significance value is 0.00 which is less than 0.05, it means it is accepted.is accepted which
shows that There is significance difference between particular education and occupation
regarding risky investment intention.

53
 Edu * income Crosstabulation

Count
Income
0-250000 250000- 500000- Above
500000 1000000 1000000
Edu 6 0 1 0
Under Graduate
Graduate 49 64 66 8
Post Graduate 26 36 110 15
Others 0 0 2 2
Total 81 100 179 25

Chie square test

Value Df Asymptotic
significance (2-
sided)
Person chie-square 59.598 9 .000
Likelihood Ratio 51.701 9 .000
Linear-by-linear 36.970 1 .000
Association
N for valid cases 385

54
 Case processing summary

Cases
Valid Missing Total
N Percent N Percent N Percent
Edu*income 100.0% 0 0.0% 385 100.0%
385

Directional measures

Value Asymptotic Approxi

Standard mate
Error T
Ordinal by Ordinal somers’d .280 .045 6.164
symmetric
Edu Dependent .251 .041 6.164

occ Dependent .318 .050 6.164

Directional Measures
Approximate
Significance
Ordinal by Ordinal somers’d symmetric .000

Edu Dependent .000

Income Dependent .000

55
 Symmetric Measures
Value Approximate
significance
Nominal by phi .393 .000
Nominal
Cramer’s V .227 .000
Total 385

H0: There is no significance difference between particular education and income regarding
risky investment intention.
H1: There is significance difference between particular education and income regarding risky
investment intention.
Here significance value is 0.00 which is less than 0.05, it means that hypothesis is accepted
which shows that There is significance difference between particular education and income
regarding risky investment intentions.

56
 Occ* income crossable

Count

Income
0-250000 250000- 500000- Above Total
500000 1000000 1000000
Occ student 41 9 8 0 58
Private Employee 15 31 32 2 80
Business 5 33 67 6 111
Professionals 8 20 67 16 111
Others 12 7 5 1 25
Total 81 100 179 25 25

Chie-square test

Value Df Asymptotic
significance (2-
sided)
Person chie-square 12 .000
156.049
Likelihood Ratio 12 .000
145.007
Linear-by-linear 47.397 1 .000
Association
N for valid cases 385

57
 Directional Measures

Value Asymptotic Approxim

Standard ate
Error T
Ordinal by Ordinal somers’d .302 .047 6.365
symmetric
occ Dependent .323 .050 6.365

Income Dependent .283 .045 6.365

Symmetric Measures

Value Approximate
significance
Nominal by phi .637 .000
Nominal
Cramer’s V .368 .000
Total 385

58
 H0: There is no significance difference between particular occupation and income regarding
risky investment intention.
H1: There is significance difference between particular occupation and income regarding risky
investment intention.
Here significance value is 0.00 which is less than 0.05, it means hypothesis is accepted which
shows that There is significance difference between particular occupation and income
regarding risky investment intention.

1. Above cross table and diagrams turn out revenue and age Details as for hazardous venture aim
and Key results from that are as cry:
1 In first scope of respondents that acquire under 250000 and whose age is between 18-30,
other than those 45 respondents are matured between 31-45 and 6 respondents are over the time
of 45. In the second period of respondents that procure somewhere in the range of 250000 and
500000 and whose age is between 18-30 are 24, other than that 61 respondents are matured
between 31-45 and 15 respondents are over the age of 45. In the third period of respondents
that procure somewhere in the range of 500000 and a million and whose age is between 18-30
are 27, other than those 135 respondents are matured between 31-45 and 17 respondents are
over the age of 45. In the fourth period of respondents that procure among a million or more
age is between 18-30 are 3, other than those 15 respondents are matured between 31-45 and 7
respondents are over the age of 45.

59
2. Above cross table and graphs provide education and occupation details with respect to risky
investment intention and Key outputs from that are as below:
In the first phase of 7 undergraduates 5 are student,1 is private employee,1 is business person.
In the second phase of 187 graduates 32 are student,43 is private employee,61 is business
person and 32 are professional and 19 are from others category. In the third phase of 187 post
graduates 20 are student,35 is private employee,49 is business person and 77 are professional
and 6 are from others category. In the fourth phase of 4 others 1 is a student,1 is a private
employee and 2 are professional.

3. Above cross table and graphs provides education and income details with respect to risky
investment intention and Key outputs from that are as below:
In the first phase of 7 undergraduates 6 of them earn below 250000,1 earns between 500000
and 1000000. In the second phase of 187 graduates 49 earn below 250000, 64 earn between
250000 and 500000,66 earn between 500000 and 1000000 and 8 earn above 1000000. In the
third phase of 187 post graduates 26 earn below 250000, 36 earn between 250000 and 500000,
110 earn between 500000 and 1000000 and 15 earn above 1000000 In the fourth phase of 4
others,2 people earn between 500000 and 1000000,2 above 1000000.
4. Above cross table and graphs provide occupation and income Details with respect to risky
investment intention and Key outputs from that are as bellow: In the first phase of 58 students,
41 of them earn below 250000,9 of them earns between 250000 and 500000,8 of them earn
between 5000000 and 1000000. In the second phase of 80 private employee ,15 earn below
250000,31 earn between 250000 and 500000,32 earn between 500000 and 1000000 and 2 earn
above 1000000. In the third phase of 111 business person,5 earn below 250000,33 earn between
250000 and 500000,67 earn between 500000 and 1000000 and 6 earn above 1000000. In the
fourth phase of 111 professionals, 8 earn below 250000,20 earn between 250000 and
500000,67 earn between 500000 and 1000000 and 16 earn above 1000000. 78 In the fifth phase
of 25 others,12 people earn below 250000,7 between 250000 and 500000,5 of them between
500000 and 1000000,1 above 1000000.

60
One-way ANOVA:
Descriptive
ORAW
95%
confidence
interval
for Mean
Std. Lower
N Mean deviation Std. error Bound
Student 58 3.7629 .58569 .07690 3.6089
Private Employee 80 3.7500 .67856 .07587 3.5990
Business 111 3.5923 .73231 .06951 3.4546
Professional 111 3.5878 .59127 .05612 3.4766
Others 25 3.3000 1.00000 .20000 2.8872
Total 385 3.6305 .68963 .03515 3.5614

One-way ANOVA analysis of variance is a technique to compare means of three or more

samples. This technique can only be used for numerical data. Now, we want to test whether
our dependent variables create sig impact on dependent variable or not. Here the average mean
is 3 which means respondents are agree about the risk awareness.

ANOVA
ORAW
Sum of Df Mean F Sig.
Squares Square
Between groups 5.254 4 1.314 2.814 .025
Within groups 177.375 380 .467
Total 182.629 384

61
H0: There is no significance variation between occupation and overall risk awareness.
H1: There is significance variation between occupation and overall risk awareness. Here level
of significance value is 0.025 which is less than 0.05 which means H0 is rejected and H1 is
accepted which means that there is significance variation between occupation and overall risk
awareness.

Post HOC Test

Multiple Comparisons
Dependent Variable: ORAW

Tukey HSD
(I) occ (J) occ Mean Std. Sig. 95% 95%
Difference Deviation confidence confident
(I-J) interval interval
lower upper
bound bound
STUDENT Private .01293 .11782 1.000 -.3100 .3359
Employee
Business .17059 .11069 .536 -.1328 .4740
Professional .17509 .11069 .510 -.1283 .4785
Others .46293* .16346 .039 .0149 .9110
PRIVATE Student -.01293 .11782 1.000 -.3359 .3100
EMPLOYEE
Business .15766 .10020 .515 -.1170 .4323
Professional .16216 .10020 .487 -.1125 .4368
Others .45000* .15654 .034 .0209 .8791
BUSINESS Student -.17059 .11069 .536 -.4740 .1328
Private -.15766 .10020 .515 -.4323 .1170
Employee
Professional .00450 .09171 1.000 -.4323 .1170
Others .29234 .15125 .302 -.1222 .7069
PROFESSIONAL Student -.17509 .11069 .510 -.4785 .1283

62
 Private -.16216 .10020 .487 -.4368 .1125
Employee
Business -.00450 .09171 1.000 -.2559 .2469
Others .28784 .15125 .317 -.1267 .7024
OTHERS Student -.46293* .16346 .039 -.9110 -.0149
Private -.45000* .15654 .034 -.8791 -.0209
Employee
Business -.29234 .15125 .302 -.7069 .1222
Professional -.28784 .15125 .317 -.7024 .1267

"Sig." 0.05, as a rule of thumb, denotes a statistically significant difference between

two means. According to the table above, there is no discernible difference between
student and private employee, business and professional. Between students and
others, there is a huge difference.
There is no significant difference between private employee and student, business and
professional while there is a significant difference between private employee and
others.
There is no significant difference between business and student, private employee and
professional. While there is a significant difference between business and others.
There is no significant difference between professional and student, private employee,
professional and others.
There is no significant difference between others, business and professional while
there Is significant difference between others.

Homogeneous Subsets
ORAW
Subset for alpha =0.05
Occ 1 2
N
Others 25 3.3000
Professional 111 3.5878 3.5878
Business 111 3.5923 3.5923

63
 Private Employee 80 3.7500
Student 58 3.7629
Sig. .152 .649

The tables of homogeneous subsets reveal which groups have the same mean and which have a
different mean. Subset 1 contains the others, while subset 2 contains the private employee and
student. Within a subset there is no significance different while between subsets there is a
substantial difference professional and business have same mean in both the subsets.

Means plot

Regression
Descriptive statistics
Mean Std. deviation N
ORIT 3.5834 .67741 385
OBL 3.5143 .91083 385
OAL 3.5805 .69410 385
ORAW 3.6305 .68963 385
OLOC 2.6506 .88959 385

64
 Correlations

ORIT OBL OAL ORAW OLOC

Pearson correlation ORIT 1.000 .222 .309 .320 .033
OBL .222 1.000 -.021 .169 -.146
OAL .309 -.021 1.000 .363 .071
ORAW .320 .169 .363 1.000 -.018
OLOC .033 -.146 .071 -.081 1.000
Sig.(1-tailed) ORIT .000 .000 .000 .259
OBL .000 .341 .002 .002
OAL .000 .341 .000 .083
ORAW .000 .000 .000 .362
OLOC .259 .002 .083 .362
N ORIT 385 385 385 385 385
OBL 385 385 385 385 385
OAL 385 385 385 385 385
ORAW 385 385 385 385 385
OLOC 385 385 385 385 385

Risky investment intention

H0: There is no significant relationship between risky investment intention and Risk awareness
H1: There is significant relationship between risky investment intention and Risk averness.
Correlation coefficient is 0.320 and sig. value is 0.000 (less than 0.05) hence null hypothesis is
Rejected.

Basic literacy
H0: There is no significant relationship between risky investment intention and basic literacy

65
H1: There is significant relationship between risky investment intention and basic literacy.
Correlation coefficient is 0.222 and sig. value is 0.000 (less than 0.05) hence null hypothesis is
Rejected.

Advanced literacy

H0: There is no significant relationship between risk awareness and advanced literacy
H1: There is significant relationship between risky awareness and advanced literacy. Correlation
coefficient is 0.363 and sig. value is 0.000 (less than 0.05) hence null hypothesis is Rejected.

Risk Awareness

H0: There is no significant relationship between risk awareness and advanced literacy
H1: There is significant relationship between risky awareness and advanced literacy. Correlation
coefficient is 0.363 and sig. value is 0.000 (less than 0.05) hence null hypothesis is Rejected.

Locus of control

H0: There is no significant relationship between locus of control and advanced literacy
H1: There is significant relationship between locus of control 0.071 and advanced literacy.
Correlation coefficient is 0.363 and sig. value is 0.000 (less than 0.05) hence null hypothesis is
Rejected.

66
 Model Summary
Model R R Adjusted Std. error R F change Df1
Square R Square of the Square
Estimate change
1 .320 .103 .100 .64259 .103 43.744 1

2 .381 .145 .141 .62798 .043 19.032 1

3 .426 .181 .175 .61542 .036 16.746 1

Model Summary
Model Df2 Sig. F change
1 383 .000
2 382 .000
3 381 .000 1.231

ANOVA
Model Sum of Df Mean F Sig.
squares Square
1 Regression 18.063 1 18.063 43.744 .000
Residual 158.151 383 .413
Total 176.214 384
2 Regression 25.568 2 12.784 32.418 .000
Residual 150.645 382 .394
Total 176.214 384
3 Regression 31.911 3 10.637 28.085 .000
Residual 144.303 381 .379
Total 176.214 384

67
 Coefficients

Unstandardized Standardize t Sig. Correlatio

coefficients d Coefficient ns Zero-
order
Mod B Std. Beta
el error
1 (constant) 2.442 .176 13.896 .000

ORAW .314 .048 .320 6.614 .000 .320

2 (constant) 1.954 .205 9.542 .000

ORAW .235 .050 .240 4.721 .000 .320

OAL .216 .050 .222 4.363 .000 .309

3 (constant) 1.525 .226 6.736 .000

ORAW .197 .050 .200 3.955 .000 .320

OAL .234 .049 .240 4.800 .000 .309

OBL .144 .035 .193 4.092 .000 .222

68
 Coefficients
Correlations
Model Partial Part Tolerance VIF
1 (Constant)
ORAW .320 .320 1.000 1.000

2 (constant)
ORAW .235 .223 .868 1.152

OAL .218 .206 .868 1.152

3 (constant)
ORAW .199 .183 .837 1.195

OAL .239 .223 .861 1.161

OBL .205 .190 .964 1.038

Charts

69
Initial cluster centres
Cluster
1 2
BL1 3.87 3.82
BL2 3.92 3.36
BL3 3.97 3.25
BL4 3.97 3.19
BL5 3.94 3.26
AL1 3.45 3.68
AL2 3.48 3.67
AL3 3.57 3.69
AL4 3.37 3.55
RI1 3.76 3.70
RI2 3.64 3.60
RI3 3.62 3.52

70
RI4 3.52 3.45
RI5 3.61 3.51
RA1 3.70 3.63
RA2 3.71 3.69
RA3 3.66 3.65
RA4 3.53 3.51
LC1 1.38 2.71
LC2 1.69 3.40
LC3 2.13 3.27
LC4 1.69 3.42

ANOVA
Cluster Error
Mean 6 Mean Df F Sig.
Square square
BL1 31.318 1 1.407 383 22.257 .000
BL2 27.433 1 .760 383 36.107 .000
BL3 46.592 1 .944 383 49.361 .000
BL4 53.981 1 .867 383 62.258 .000
BL5 41.669 1 .790 383 52.749 .000
AL1 4.476 1 .868 383 5.158 .024
AL2 3.410 1 .651 383 4.825 .029
AL3 1.284 1 .807 383 1.590 .208
AL4 3.013 1 .656 383 4.595 .033
RI1 .250 1 .687 383 .364 .546
RI2 .175 1 .566 383 .310 .578
RI3 .930 1 .856 383 1.086 .298
RI4 .550 1 .583 383 .942 .332

71
 RI5 .901 1 .800 383 1.126 .289
RA1 .456 1 .727 383 .626 .429
RA2 .024 1 .630 383 .037 .847
RA3 .002 1 .697 383 .003 .960
RA4 .048 1 .700 383 .069 .793
LC1 157.091 1 .883 383 177.997 .000
LC2 265.808 1 .588 383 452.156 .000
LC3 117.374 1 .667 383 176.100 .000
LC4 270.942 1 .522 383 519.250 .000

Income * Edu* Cluster number of case crosstabulation

Count
Crosstab/
Cluster number Under Graduate Post Others
of case Graduate Graduate
1 income 0-250000 3 23 11 0

250000- 0 26 16 0
500000
500000- 0 20 37 1
1000000
1000000 0 2 3 1
and above
Total 3 71
2 Income 0-250000 3 26 20 0
250000- 0 38 73 0
500000
500000- 1 46 12 1
1000000

72
 1000000 0 6 12 1
and above
Total 4 116 120 2
3 Income 0-250000 6 49 26 0
250000- 0 64 36 0
500000
500000- 1 66 110 2
1000000
1000000 0 8 15 2
and above
Total 7 187 187 4

Income*Edu* Cluster number of case crosstabulation

Count
Cluster number of case Total
1 Income 0-250000 37
250000-500000 42
500000-1000000 58
1000000 and above 6
Total 143
2 Income 0-250000 44
250000-500000 58
500000-1000000 121
1000000 and above 19
Total 242
3 Income 0-250000 81
250000-500000 100
500000-1000000 179

73
 1000000 and above 25
Total 385

74
 CHAPTER: 5
FINDINGS,
SUGGESTIONS AND
RECOMMENDATIONS

75
FINDINGS:

• From the analysis of the data it can be deduced that the majority of the investors belong
to the age group of 31-45 years, which represents 66.5% of the total.
• Most of the respondents are graduates and graduates in 48.6%.
• The majority of those surveyed are entrepreneurs with 28.8%.
• Most of the respondents have an annual income of 5-10 lakh, or about 46.5%.
• 6.5% of those surveyed have an annual income of more than 6.5%.
• The data revealed that companies and professionals are the most likely to invest.
• Most investors prefer to opt for safer investment channels.
• Data shows that respondents lack financial literacy.
• It was found that if the respondents had more financial knowledge, they would have
taken more risks after proper analysis.
• It has been determined that investors bear the same financial risk as general risk.
• The risk-taking capacity of the entrepreneurs was superior to that of the others.
• Most respondents make financial decisions without the help of experts or proper
planning and analysis.
• Respondents tend to avoid investing in the stock market due to its volatility and fear of
losing money.

76
SUGGESTIONS/PRACTICAL IMPLICATION:

• Financial knowledge must be imparted to investors by various schools, colleges,

universities, finance companies and banks.
• Investors should do financial planning with the help of experts.
• Investors must constantly update themselves by studying monthly, quarterly and annual
reports and making the necessary changes in their portfolio.
• Financial risk must be taken separately from risk taken in life in general.
• Investors should review the financial documents and study the relevant terms and
conditions.
• The investment must be made after proper calculations and analysis taking into account
the financial objective of the person.

THEORETICAL IMPLICATION:

• This study will help understand the concept of interrelation between independent
factors such as basic literacy, advanced literacy, locus of control and risk aversion with
the intention of risk investment that leads directly or indirectly to knowing the level of
financial literacy and financial behaviour.
• The measurement instrument was planned using the existing literature, with a test of its
reliability and validity.

77
 CHAPTER:6
CONCLUSION &
BIBLIOGRAPHY

78
CONCLUSION:

The graphs and tables in the treatment sections represent the survey results indicating some
valuable findings in this study. People's risk-taking ability has a significant effect on risky
investment intention. The study identified factors that influence risky investment intention. The
study also draws an important conclusion from the study that investors are willing to invest in
long-term and less risky, high-yield, low-risk products and very interested in getting a good
return on their investment. The investor must constantly update himself so that he can improve
his level of financial education and be financially independent.

79
BIBLIOGRAPHY:

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83
QUESTIONNAIRE:

1) Name: _______________________________________________

2) Email Id: _____________________________________________

3) Age group:

a. 18-30
b. 31-45
c. >45

4) Education:

a. Under graduate
b. Graduate
c. Post graduate
d. Others

5) Occupation:

a. Student
b. Private employee
c. Business
d. Professional
e. Others:

6)Annual income:

a. 0-250000
b. 250000-500000
c. 500000-1000000
d. 1000000 and above

7)Marital status:

a. Married
b. Unmarried

84
 Basic financial literacy

Strongly Disagree Neutral Agree Strongly Agree

disagree
1) I have basic knowledge and
understanding of the investment
avenues.
2)One should have a formal
financial plan for investment
purpose.
3)Investment in stock market is the
riskiest of all the investments.
4)For the purpose of safety I prefer
to diversify the investment in
various avenues.
5)For the purpose of earning higher
return, I prefer to take more risk.

Advanced financial literacy

Strongly Disagree Neutral Agree Strongly Agree

disagree
1)Whenever I invest
money, I take the time
value of money into
consideration.
2)I prefer to invest in
mutual funds rather than
equity, as I believe that
my risk will be
diversified.

85
3)I study the stock
market on a regular basis.
4)I believe in keeping the
stocks for a longer
duration to gain higher
return and bear lower
risk.

5) what are the various investment avenues you have already invested in?

a. Equity
b. Bonds
c. mutual funds
d. company deposits
e. bank deposits
f. post office deposits
g. insurance
h. provident fund
i. real estate

Risky investment intentions

Strongly Disagree Neutral Agree Strongly

disagree Agree
1)I would be willing to take
risk percentage of me
income/capital, in order to get
good returns on me
investment.
2)I would rather know and be
interested that I will get
good return on my investment
than be uncertain
about my investments.

86
3)I prefer to protect my
portfolio then to take risk and
earn higher returns.
4)while doing investment I
am concerned more about
the possible losses than
possible gains.
5)I think that if there will be
an increase in the
financial literacy of
individuals, then there will be
investment intention for the
same.

Risk awareness

Strongly Disagree Neutral Agree Strongly

disagree Agree
1)I take risk factor into
consideration while investing.
2)I believe that by taking more
risk. I will be able to improve my
financial position.
3)I am ready to take risk to lose
money. If there is a probability to
gain money.
4)I find it risky to invest in
equity market that is
why I prefer other investment
options, as I want my
investments to be safe.

Locus of control:

87
 Strongly Disagree Neutral Agree Strongly
disagree Agree
1)In the long run, people who
take very good care of their
finances stay wealthy.
2)Locus of control affects the
financial management.
3) Locus of control has a
stronger relation with
investment in equity for
financially illiterate
investors.
4)Internally controlled
individual is more likely to
invest in equity stock market
after studying the past
performances of the company
without

88

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