Moderating Effect of Risk Perception on Financial Knowledge, Literacy and Investment Decision
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Abstract
Financially unsophisticated investors who consistently make sub-optimal financial decisions may suffer lasting
consequences for long-term wealth accumulation and welfare. This study examines moderating effect of risk
perception on financial knowledge, literacy and investment decision. Data was collected from 378 investors through
the aids of structured questionnaires. The research hypotheses were tested using partial Least-square (PLS)
regression. The findings reveals that there is positive and significant effect between financial knowledge, risk
perception and investment decisions, while positive but insignificant effect was found between financial literacy and
investment decisions. However, risk perception moderates the effect of financial literacy, investment knowledge on
investment decisions. It recommends that investors, policymakers and individuals investors should embark on
various educational programmes, to further influence the level of their investment decisions before committing their
hard earning fund into project.
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