Behavioral Bias as an Instrumental Factor in Investment Decision-An Empirical Analysis

Abstract

Investment decisions are always complex in nature. Investment assets are volatile in nature there are less volatile, medium volatile and high volatile investment assets in the financial market. In the current study how, the behavioral biases of the investors affecting their investment decisions in the less volatile asset classes is examined using an extensive survey method among the IT professionals in the Bangalore city. The relationship between the demographic variables and behavioral biases is tested. Also, a detailed study is conducted to examine the risk-taking behavior of the investors in the less volatile assets. There are basically three type of investors on the basis of their risk-taking behavior i.e. Risk seeking, Risk Neutral and Risk averse investors. Current study reveals that investors in the less volatile asset classes are very much cautious about the risk factor and therefore they are risk averse in nature.