1. THE IMPACT OF FINANCIAL LITERACY AND RISK TOLERANCE ON INVESTMENT
DECISION
In Partial Fulfillment of the Requirements for the Degree of Bachelor of
Business Administration-Finance (BBA-F)
Submitted By: Supervisor
Manisha Neupane Jhabindra Pokheral
Shanker Dev Campus
Roll No. 183/18
Reg. No. 7-2-39-1826-2018
3. Research Question
1. What is the level of financial literacy, risk tolerance and investment decision across male and female
undergraduate students?
2. What is the relationship of financial literacy and risk tolerance with undergraduate students’ investment
decision?
3. What is the impact of financial literacy and risk tolerance on undergraduate students’ investment
decision?
4. Objectives
1. To examine the level of financial literacy, risk tolerance and students’ investment decision across male
and female,
2. To analyze the relationship of financial literacy, risk tolerance and students’ investment decision,
3. To explore the impact of financial literacy and risk tolerance on students’ investment decision.
5. Research Methodology
• Research Design: Descriptive, relational and causal Comparative design were used in the study
• Data sources: Primary source of data were collected for the study
• Population : Total number students studying on Sorhakhutte area.
• Sample size : 105
• Method of Data collection : Questionnaire distributed among people
• Data Analysis : (SPSS software for table and figures, Correlation Analysis for dependent and
independent variables)
6. Findings
1. The financial literacy has no significant difference across male and female as the p- value is 0.227 which is greater than 0.05.
Financial literacy remains same for all students as financial literacy.
2. There is no significant difference of risk tolerance across male and female as p- value is 0.974 which is greater than 0.05.
There is no significant difference of investment decision across male and female as p-value is 0.503 which is greater than
0.05. Thus, financial literacy, risk tolerance and investment decision all remains same for all students.
3. The relationship of financial literacy and investment decision is found to be positive and significant at 99 percent of
confidence level with the correlation coefficient of 0.300, which means financial literacy has significant relation to the
investment decision of undergraduate students.
4. The relationship of risk tolerance and investment decision is observed to be positive and statistically significant 99 percent
confidence level with the correlation coefficient of 0.482, which means there is significant relation between the variables.
7. 1. The impact of financial literacy is found to be positive and significant at 99 percent confidence level. The
coefficient of financial literacy shows that increase in financial literacy cause the increase in investment
decision of the students.
2. The impact of risk tolerance is found to be positive and significant at 99 percent confidence level. The
coefficient of risk tolerance shows that increase in risk tolerance cause the increase in investment
decision of undergraduate students.
8. Conclusion
• With the aim of evaluating the differences, explore the relationship, and examine the effect of independent
variables: financial literacy and risk tolerance and dependent variable: investment decision of undergraduate
students of Sorhakhutte area, the descriptive, correlation, and causal research design have been applied and
primary data is used for the analysis.
• We have come to the conclusion the financial literacy has positive as well as significant relation with
undergraduate student’s investment decision.
• So it can be concluded with the research that financial literacy is the key thing in financial market.
• The data analysis also shows that risk tolerance has positive as well as significant relation with the investment
decision of undergraduate students.
• So, risk tolerance also affects significantly in investment decision thus, it is necessary to know about the risk
and return associated to that risk.
