Financial Literacy about Stock Market among the Participants of Bombay Stock Exchange

Financial mistakes made at any stage of life can be costly. To avoid such mistakes, financial literacy is very important. Financial literacy is buzzword now days, and its importance has accepted all over the world. Financial literacy is required for any financial decision making. But his term is subjective in nature. So it varies according to investors. Investing in stock market is still not so popular in India because of its complicated nature and lack of financial literacy. This paper attempts to find out the literacy levels of stock market participants of Bombay Stock Exchange. Stock market participation is strongly related to financial literacy. Previous research was focused on financial literacy and reasons behind less stock market participation. In this study, stock market participant’s financial literacy regarding stock market functions has been assessed. Those who participate in stock market are considered to be a risk taking investors, and it is expected that investor must have basic knowledge about stock market. BSE is one of the oldest stock market in world. So the participants of BSE will be the great population to test financial literacy levels. This study is based on primary data collected through a survey from BSE participants as well as on secondary data.

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Financial Sophistication, Personality and Stock Market Participation: Theory and Evidence

Lahore Journal of Business ◽

10.35536/ljb.2018.v7.i1.a3 ◽

2018 ◽

Vol 7 (1) ◽

pp. 61-84

Author(s):

Muhammad Akhtar ◽

Faqir Muhammad ◽

Muhammad Ayub Siddiqui

Keyword(s):

Stock Market ◽

Financial Literacy ◽

Negative Impact ◽

Future Research ◽

Market Participation ◽

Market Participants ◽

Stock Market Participation ◽

And Gender ◽

Viable Approach ◽

The Impact

In this empirical study, the authors examined the extent to which financial sophistication and personality effects stock market participation. Using archival research methodology, our hypothesis has been tested on a random sample of 451 stock market participants. Moderation has been tested through Andrew Hayes process. Extroversion and openness to experience positively impact stock market participation, while consciousness, agreeableness, and neuroticism have a negative impact. Financial literacy, trading experience and gender are the likely paths by which personality impacts stock market participation. Financial literacy can modify the relationship between some basic personality traits and stock market participation. It shows that behavior finance is not completely predetermined by one’s DNA and also identifies which traits are less influenced by financial literacy. Perhaps this implies that these traits are more predetermined by one’s innate characteristics. This study provides an interdisciplinary contribution by extending Big Five taxonomy as a viable approach for stock market participation. Future research may investigate the impact of family resources, investment exposure, and parent’s financial literacy, which were beyond the scope of the current study. The theoretical and practical implications of the study with respect to stock market participation are discussed.

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Examining the Level of Financial Literacy among Saudi Investors and Its Impact on Financial Decisions

International Journal of Accounting and Financial Reporting ◽

10.5296/ijafr.v4i2.6487 ◽

2014 ◽

Vol 1 (1) ◽

pp. 312 ◽

Cited By ~ 2

Author(s):

Tariq Saeed Mian

Keyword(s):

Stock Market ◽

Financial Literacy ◽

Financial Services ◽

Negative Relationship ◽

Retirement Planning ◽

Market Participation ◽

Financial Decisions ◽

Stock Market Participation ◽

Financial Decision ◽

The Impact

Financial literacy and information requires that a person knows and understands the forms, functions and use of money and financial services. In today’s world financial literacy is important to every individual who wishes to select the best way to carry out payments and take care of banking issues. The current paper examines the impact of different demographic variables on the level of financial literacy among Saudi investors. Furthermore, the impact of financial literacy on different kinds of financial decision making is also investigated. The result of the current study confirms a significant impact from gender and age on financial literacy. Males are more financially literate than females, and older people also show a higher level of financial literacy compared with younger people. There is no significant impact from educational level and current work situation on financial literacy. Financial literacy is measured in reference to retirement planning and stock market participation. People with a higher level of financial literacy have a greater urge to engage in retirement planning and stock market participation. However, there is a negative relationship between financial literacy and the need for financial advice.

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