An Empirical Analysis of Financial Risk Tolerance and Demographic Features of Individual Investors

Financial risk tolerance is the level of risk that a client believes they are willing to accept. Risk Tolerance must be measured simply because it is an aspect of utility for any investment decision and maximizing the expected utility is considered to be the ultimate goal in any financial activity. The paper reports the results of the study that was designed to examine the association/relationship between the risk tolerance of individual investors and their demographic features. Most of the anticipated relationship between financial risk tolerance and each of the demographic features from the literature were found to be relevant.