A study of risk taking behavior in Malaysian stock market

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Date
2007
Authors
Sahul Hamid, Fazelina
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Volume Title
Publisher
Universiti Sains Malaysia
Abstract
This research studied the risk taking behavior of individual investors in the Malaysian stock market. A theoretical framework was developed to test the risk taking behavior of individual investors. There were five independent variables in the proposed model - risk preference, inertia, less risk outcome history, problem framing and problem domain familiarity. Risk propensity and risk perception were the two mediating variables in this model. Hypotheses were tested with 162 investors from eight stockbroking companies. It was found out that risk preference and inertia had significant effect on risk propensity whereas problem domain familiarity had significant effect on risk perception. This study failed to confirm the mediating role of risk propensity and risk perception. Overall, inertia, less risk outcome history and risk propensity have been found to have significant effect on investors risk taking behavior
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Keywords
Stock market
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