Mind the Gap: Inconsistencies Between Subjective and Objective Financial Risk Tolerance.
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| Title: | Mind the Gap: Inconsistencies Between Subjective and Objective Financial Risk Tolerance. |
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| Authors: | Marinelli, Nicoletta (AUTHOR), Mazzoli, Camilla (AUTHOR), Palmucci, Fabrizio (AUTHOR) |
| Source: | Journal of Behavioral Finance. Apr-Jun2017, Vol. 18 Issue 2, p219-230. 12p. |
| Subjects: | Financial risk, Default (Finance), Risk assessment, Accounting, Investments, Financial literacy |
| Abstract: | Investors' financial risk tolerance is crucial in the formulation of suitable financial advice; in the past, assessment efforts relied on multiple approaches and techniques, but their consistency is still an issue. The authors focus on 2 metrics traditionally proposed (self-assessment and portfolio composition) and test their mutual consistency on a sample of 2,374 investors. The approach allows them to discriminate between inconsistencies due to wrong portfolio compositions and those arising from wrong self-assessments. The authors show that low financial literacy, high income, no children, and incautious economic behavior are commonly associated with such inconsistencies. [ABSTRACT FROM PUBLISHER] |
| Copyright of Journal of Behavioral Finance is the property of Taylor & Francis Ltd and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) | |
| Database: | Psychology and Behavioral Sciences Collection |
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