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Dave, Niyati
- Quantification of Risk Appetite for Young Professionals:An Empirical Study
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This paper is an attempt to contribute in this direction by developing the instrument for quantification of risk appetite. The final outcome of the study is a questionnaire with twelve items and four factors; 1.Psychological Perspective, 2.Financial Stability Perspective, 3.Societal Perspective, 4.Tendency to Panic. The researchers used Factor Analysis (EFA) to surface dominant factors attributable to quantification of risk appetite. The methodological framework included identification of factors by using anti-image correlations and Varimax Rotated Component Matrix. The sample of 160 young professionals from Rajkot and Ahmedabad were found adequate as per Kaiser-Meyer-Olkin Measure of Sampling Adequacy. As the study pertains to quantification of complex behavioral aspect, Chronbach’s Alpha of fifty percent was considered satisfactory.
The researchers believe that the study will predominantly facilitate Portfolio Management Services (PMS) to categorize investors based on their risk appetite. This would also be of relevance for Asset Management Companies (AMCs) to structure the schemes according to the risk profile of the investors.
Authors
Abhay Raja
1,
Niyati Dave
2
Affiliations
1 Shanti Business School, Ahmedabad, Gujarat, IN
2 Institute of Management, Nirma University, Ahmedabad, Gujarat, IN
1 Shanti Business School, Ahmedabad, Gujarat, IN
2 Institute of Management, Nirma University, Ahmedabad, Gujarat, IN
Source
Optimization: Journal of Research in Management, Vol 9, No 2 (2017), Pagination: 62-68Abstract
The debate over quantification of risk appetite of investor keeps evolving. As the modern portfolio theory gained prominence, the area has grabbed researchers’ interest world over resulting into many significant contributions made so far. However, this area needs exploration in Indian context to add to the existing body of knowledge.This paper is an attempt to contribute in this direction by developing the instrument for quantification of risk appetite. The final outcome of the study is a questionnaire with twelve items and four factors; 1.Psychological Perspective, 2.Financial Stability Perspective, 3.Societal Perspective, 4.Tendency to Panic. The researchers used Factor Analysis (EFA) to surface dominant factors attributable to quantification of risk appetite. The methodological framework included identification of factors by using anti-image correlations and Varimax Rotated Component Matrix. The sample of 160 young professionals from Rajkot and Ahmedabad were found adequate as per Kaiser-Meyer-Olkin Measure of Sampling Adequacy. As the study pertains to quantification of complex behavioral aspect, Chronbach’s Alpha of fifty percent was considered satisfactory.
The researchers believe that the study will predominantly facilitate Portfolio Management Services (PMS) to categorize investors based on their risk appetite. This would also be of relevance for Asset Management Companies (AMCs) to structure the schemes according to the risk profile of the investors.
Keywords
Portfolio Management Services, Risk Appetite, Behavioral Finance, Quantification of Risk, Attributes.
References
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- • Kannadhasan, M. (2015). Retail investors’ financial risk tolerance and their risk-taking behaviour: The role of demographics as differentiating and classifying factors. IIMB Management Review. 27, 175-184.
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- Role of Technology in Development of Alternative Finance in India:A Discussion
Abstract Views :204 |
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Researcher in the paper has reviewed and revisited the alternative sources of funds growing in India along with some already established sources in developed financial economies and its feasibility in India. India is the emerging as entrepreneurship and financial markets are developing and changing in evolutionary if not revolutionary manner. Keeping technology as the focus, researcher revolves around the options and sources of alternative finance, its pros cons and feasibility in India. The paper has been divided into two part first is capital availing and other is payment. Capital availing includes crowd funding and P2P lending and payment includes the Mobile wallet.
Authors
Affiliations
1 Institute of Management, Nirma University, Ahmedabad, Gujarat, IN
1 Institute of Management, Nirma University, Ahmedabad, Gujarat, IN
Source
Optimization: Journal of Research in Management, Vol 9, No 1 (2017), Pagination: 50-55Abstract
A candid reflection into the current financial system will make a realization that Traditional corporate finance just isn’t equipped to handle a fast-paced, interconnected world. Not being negative about the Indian financial services but technology has to be incremental in standing at par with the young companies requirements. Development of entrepreneurial culture and ecosystem must not negate the tech supported alternative sources of finance. Banks are becoming tech savvy however at the time due to the increased amount of risk which these young companies carry they are reluctant to back the finance requirement. Focusing on the basket of alternative finance sources like crowdfunding peer to peer lending angel investment, policy makers can provide the levee to the tech hungry startups and thus take the startup ecosystem on a strong footing.Researcher in the paper has reviewed and revisited the alternative sources of funds growing in India along with some already established sources in developed financial economies and its feasibility in India. India is the emerging as entrepreneurship and financial markets are developing and changing in evolutionary if not revolutionary manner. Keeping technology as the focus, researcher revolves around the options and sources of alternative finance, its pros cons and feasibility in India. The paper has been divided into two part first is capital availing and other is payment. Capital availing includes crowd funding and P2P lending and payment includes the Mobile wallet.