Modeling investment decision through perceived risk

Abstract

Investors constantly struggle to make decision based on reason while evaluating and inferring information gathered from a variety of sources for diverse investment options to reach at an optimal investment choice. They are also affected by different psychological dimensions that affect them and bias their decision. The present study intended to study the effect of few general dimensions on investment decision with the mediation effect of perceived risk by using survey data of stock market investors. The paper has employed Structural Equation Modeling and concludes that perceived risk has partial mediation effect between investment decision and determinants of investment decision.