This document analyzes the effect of financial knowledge on investment decisions of 200 investors from Gandhinagar District in India. It finds that urban investors have significantly higher average financial knowledge scores than rural investors, based on their answers to questions testing understanding of financial terms, risk, return, and investment avenues. A structured questionnaire was administered to 100 rural and 100 urban investors through quota sampling. Statistical analysis using mean scores, correlation, z-tests and regression found that investors with higher financial knowledge scores made more rational investment decisions based on risk and return analysis, rather than just opinions of others. The study aims to evaluate how financial knowledge impacts choice of investment options.