Impact of Historical Loss Patterns on Investors’ Risk Perception : The Moderating Role of Financial Literacy, Risk Attitude, and Investment Time Horizon
This study examines the factors that affect risk perception in investment decision-making, specifically focusing on the relationship between historical loss patterns and investors' perceived risk using experimental methods. The findings indicate that historical loss patterns significantly influence investors' perceived risk. Factors such as financial literacy, risk attitude, and investment time horizon moderate this relationship. Individuals with lower financial literacy are more susceptible to the influence of past significant losses, while those with higher financial literacy rely more on volatility information for risk assessment. Risk-averse individuals are more sensitive to extreme losses and recent losses, while investors with shorter investment horizons exhibit a stronger reaction to recent losses. This study contributes to a better understanding of individual investors' risk assessment and perception, emphasizing the importance of considering various factors in investment decision-making
Year of publication: |
[2023]
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Authors: | Luo, Lieh-Ming ; Lee, Hui-Tzu |
Publisher: |
[S.l.] : SSRN |
Saved in:
freely available
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