A Moderating Role of Risk Perception on the Relationship Between Financial Literacy and Financial Knowledge on Investment Decision

  • Dr. Sindhu .AN Assistant Professor, PG Department of Commerce, Mount Carmel College, Autonomous, Bengaluru
  • Dr. Dharmendra .H Assistant Professor, Department of Management Studies, Mount Carmel College, Autonomous, Bengaluru
Keywords: Financial Literacy Financial Knowledge, Investment Decisions, Risk Perception


Financial literacy is a knowledge of money and financial products that people may apply to their financial decisions in order to make well-informed judgments about their finances. The goal of this study is to see how financial literacy, financial knowledge, and risk perception affect investment decisions, as well as to see if risk perception has a moderating impact. The study is descriptive in nature, and a cross-sectional survey was used as part of the methodology. Hypotheses were established and tested after constructing a systematic questionnaire with 14 items. The information was gathered from 424 individual investors using a convenience sampling method, with 416 replies qualifying for the study and the remaining responses being discarded owing to insufficient information.Partial least square (PLS) regression was used to analyse the data. Financial literacy, financial awareness, and risk perception all had a beneficial impact on investment decisions, according to the study’s findings. The moderator risk perception has a modest effect on the association between financial knowledge and investment, but it has a poor effect on the relationship between financial literacy and investment decisions.

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