The Impact of Demographic Factors on Risk Tolerance Level of Individual Investors in Kurunegala District

Abstract

Humans are unique from each other based on the demographical characteristics they possess. The inspiration to find the uniqueness in investment decisions in relation to the risk tolerance level of investors who owned different demographical characteristics have incited the researcher to investigate. Basically, the objective of the study is to identify whether there is an impact of demographic characteristics on the risk tolerance level of individual investors. Investors in Kurunegala District is the population of the study and in 2018 the investors above the age of 19 was 1,331,705 approximately. The researcher has used both ordinary cluster sampling method and simple random sampling technique to design the sample. Correlation and regression tests are used to explore the outcome of the collected data set and the findings have revealed that demographic factors have a significant impact on the risk tolerance level of individual investors, but demographic factors such as gender, occupation, civil status and family size do not have a significant impact on the risk tolerance level of individual investors. Risk tolerance level of investors is a prompt concept of investment by which the decisions of investors are directed.