A Study on Impact of Risk Tolerance on Mutual Fund Investors

Abstract

This study investigates the impact of risk tolerance on mutual fund investment behavior in Himachal Pradesh, India using information gathered from 450 respondents in the districts of Kangra, Una, and Hamirpur, the study uses regression analysis to look into the connection between mutual fund investments and risk tolerance. The results indicate that risk tolerance and mutual fund investing have a statistically significant and substantially favourable connection. With standard deviations indicating some variation in respondents’ risk preferences, descriptive statistics show a higher-than-average risk tolerance and investment activity. The results of the regression analysis indicate that variations in risk tolerance account for 70% of the variance in mutual fund investment behavior. The findings show that respondents who have higher risk tolerance are more inclined to invest in mutual funds, underscoring the importance of risk tolerance in financial decision-making. In order to promote wise mutual fund investing practices, financial advisors and policymaker can benefit greatly from the study’s observations, which emphasize the significance of comprehending behavioral trends in investing.