Risk Perception of Mutual Fund Investors

Abstract

Every investor likes return and dislikes risk, but risk is deeply rooted in all financial markets. A positive relationship persists between risk and return. Mostly investors are risk averse, which means that if everything else is the same, they will select the investment that offers greater certainty. The main objective of this study is to reveal the risk perception of Mutual Fund Investors of Jammu and Kashmir, as risk perception of individual investors usually affects their investment decision. The study considers some of the important factors for understanding the risk perception of individual/retail mutual fund investors of Jammu and Kashmir. For measuring the respondents’ perceptions, the study employs the Likert scale technique. The study employs the Factor Analysis technique to identify the underlying dimensions or factors that explain the correlations among a set of variables regarding the risk perception of mutual fund investors.