How Volatility Is Impacted By Investor’s Perception And Behavior In Indian Stock Market?

Abstract

This paper focuses on the study of the impact of investor’s perception and behaviour on volatility in
Indian Stock Market. For conducting this study three biases are used as proxy for judging investor’s
perception and behaviour. These are Overconfidence, Disposition Effect and Herding. The final sample
size collected were 612 investors who actively participate in the Indian stock market. The survey was
conducted by online mode. The results indicate that Herding and Overconfidence bias has positive
impact on Volatility in Indian Stock Market. On the contrary, disposition bias does not have a statistically
significant impact on Volatility in Indian Stock Market. Thus, the paper concludes that there is
association between investor’s perception or behaviour and volatility in Indian Stock Market.