A Study on Determinants of Financial Risk Tolerance

Abstract

Financial risk tolerance is one of the key elements for financial service providers and investors. It is essential for both to understand the risk level. Therefore understanding, assessing and measuring financial risk and factors that affect financial risk tolerance of investors have been interest of research. The purpose of this study is to investigate the relationship between age, annual income, education, occupation, gender, marital status and financial risk tolerance level. The multiple regressions used to predict the relationship between demographic factors and financial risk tolerance level. The study indicates positive relationship with annual income, education, occupation, and gender where as negative relationship with age and marital status. The financial risk tolerance increases with increase in annual income and education level while decreases with increase in age and get married.