Risk Tolerance and Investment Preferences in Bosnia and Herzegovina

Mela , Hadrovic and ERGÜN, Uğur (2012) Risk Tolerance and Investment Preferences in Bosnia and Herzegovina. In: 3rd International Symposium on Sustainable Development, May 31 - June 01 2012, Sarajevo.

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Abstract

Risk tolerance is considered as an important factor in making financial decisions, saving and investment choices. This paper has examined level of investment risk tolerance and investment preferences of B&H’s population and it had explored whether demographic and socioeconomic factors to risk tolerance and investment preferences. Using a randomly chosen sample of 200 individuals above the age of 20, empirical analysis has shown that above independent variables that are significantly affecting individual’s risk tolerance are income level, education level and gender. Regression analysis has proven that above average risk tolerance is associated with higher income level and higher education level. Moreover, analysis has supported the assumption that males are more risk tolerant then females. Regarding the investment preferences, obtained results show that the out of eight independent variables, only variable measuring whether an individual has a financial commitment is significantly negatively related to the investment. Keywords: Risk tolerance, Risk aversion, Investment preferences, demographic and socioeconomic factors, regression model, level of significance.

Item Type: Conference or Workshop Item (Paper)
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
H Social Sciences > HJ Public Finance
Divisions: Faculty of Economics > Management Department
Depositing User: Users 173 not found.
Date Deposited: 02 Nov 2012 13:51
Last Modified: 02 Nov 2012 13:51
URI: http://eprints.ibu.edu.ba/id/eprint/1327

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