Abstract:
The present paper measures the risk perception of the bank employees in respect of investment in mutual fund and to identify the factors affecting risk perception. The paper also attempts to find out the impact of these factors on overall risk perception. The study is based on primary data collected by using questionnaire from the bank employees in Tripura state of India. For the analysis of data, Cronbach’s alpha, factor analysis, binary logistic regression, mean and standard deviation, and etcetera are used. It is found that bank employees’ overall level of risk perception is moderate. There are three factors that affect the overall risk perception namely fear psychosis, lack of knowledge, and lack of confidence and these three factors have impact on the investment decision employees are making with regard to investment in mutual fund. The study is the first of its kind and hence original in nature.
Machine summary:
"Department of Management Studies, Indian Institute of Information Technology Allahabad-211012 Uttar Pradesh, India (Received: November 23, 2017; Revised: May 15, 2018; Accepted: May 21, 2018) Abstract The present paper measures the risk perception of the bank employees in respect of investment in mutual fund and to identify the factors affecting risk perception.
There are three factors that affect the overall risk perception namely fear psychosis, lack of knowledge, and lack of confidence and these three factors have impact on the investment decision employees are making with regard to investment in mutual fund.
From the above review of literature, it is evident that there is little research done to assess risk perception level of bank employees with respect to their investment in mutual funds, who are directly dealing with financial product and expected to be financially literate.
These are Factor 1 (fear psychosis of investors), Factor 2 (Investor’s lack of knowledge) and Factor 3 (Investor’s lack of confidence) As dependent variable is on nominal scale and dichotomous, linear regression model cannot be used as a good model in order to find the impact of identified factors affecting risk perception on investment in mutual fund.
It is seen that all the factors of risk perception (fear psychosis of investors, investor’s lack of knowledge and investor’s lack of confidence) have significant impact on investment decision in mutual fund at 5% level of significance."