The Influence of Financial Literacy Towards Investors Attitude and Its Implication on Decision Making

Abstract

Financial Literacy benefits the individuals or investors in taking the informed decisions with minimum risk. The main objective of this research is to identify the level of financial literacy among investors and to study the impact of financial literacy on investment attitude and subsequent impact on decision making of investors. Also study attempts to find out that whether attitude plays a significant role as mediator between relationship of financial literacy and investors attitude. This study adopts Descriptive research design. Both primary source of data and secondary data are used. A quantitative methodology was emulated and information was acquired through an organized online and offline survey done with retail investors. This study has been conducted in National Capital region, Individual newlineretail investors above 18 years of age are taken into account as population for this newlinestudy. The Sample of study comprised of 511 investors, selected using purposive newlinesampling technique. The demographic analysis has been done using percentage newlineanalysis and chi-square analysis. newlineRelationship among variables is established through structural equation modeling.The mediating effect is also analyzed using path model. Findings of study shows that Majority of investors are less financial literate in some of the areas of basic financial newlineliteracy and some of them are highly literate in specific areas of finance. It is also concluded that respondents with formal financial education, possess comparatively more financial knowledge than others. Overall there is a balance between investors newlinewho have low literacy and those have high literacy in specific area of finance. Study identified that financial literacy significantly effect decision making of investors. It is concluded having high financial literacy empowers investors with informed decision newlinemaking ability and financial literacy leads to change in attitude of investor s i.e. significant relation exist between both. newline newline