STUDY ON THE FINANCIAL RISK PROFILE OF INVESTORS IN CHENNA

Abstract

Financial risk profiling assesses the investor’s attitude towards risk when making investment choices and accordingly categorise them into risk averse and risk seeking. The aim of this study is understand the financial risk profile of the investors in Chennai and classify them into the different categories. The influence of socio-demographic factors on the investor’s risk profile is also studied. Also, this study examines the relationship between the subjective and objective risk tolerance of the investor. Regression analysis is done to find the influence of the socio demographic factors on the investors risk profile. It was found from the study that the socio demo factors like age, income, occupation have a significant influence on the risk taking capacity of the investor whereas gender does not have any
significant relation with the investor’s risk profile. Majority of the investors in Chennai are risk neutral, somewhat risk averse and somewhat risk seeking. Very few are present in the risk averse and risk seeking area. Also from this study it was found that there exists no significant relationship between the subjective and objective risk tolerance level of the investor.