The Study of Risk Perception Associated With Mutual Fund as Investment Choice among First Time Investors

Abstract

Investment decisions are always matter of Risk perception especially when individuals are from first time investors’ category. This Risk perception associated with any of the financial investment instruments make these less viable in the market and their acceptance become a problem for the promoting organization. Thus there was a need to understand this Risk perception associated with especially Mutual Fund investment decision among first time investors. This study explored the responses from 411 first time investors from Madhya Pradesh region and analyses this for understanding the decision making of such individuals. These individuals were further categories in various demographic categories to find the significant difference among it. The study utilized the data collected with pre-determined structured questionnaire between Dec. 2020 and Feb. 2021 in Madhya Pradesh. The study concluded that the Risk perception association with mutual fund investment decision was higher in case of female investors compared to male investors. Further categorical analysis showed that the profession, education and location were important factors that has significant impact on Risk perception.