A Conceptual Investigation: Exploration of the Relationship between Financial Behavior on Perception of Financial Risk in Investment Decision

Abstract

An increasing body of studies is aimed at seeking a solution to enhance the perception of financial risk (FRP) in decisions regarding investments. Financial institutions mainly undertake this research and have demonstrated that several aspects contribute to this dimension. The study has shown that financial risk perception is a significant component that fosters investors’ investment decisions. Prior research on FRP has mainly concentrated on pinpointing the parameters that influence FRP levels in financial activities with the aim of enhancing FRP. However, financial studies need a more comprehensive conceptual and theoretical understanding of the impact of financial behavior on FRP in investment decision-making. Hence, this research constitutes a theoretical framework that elucidates the impact of financial behavior on FRP in investment decision-making within the Indian market. Prior worldwide research indicates that the FRP may be enhanced by adopting good financial conduct. Therefore, it is crucial to investigate financial behavior and the impact of financial risk perception in investment decisions in the Indian environment. This extensive discourse will be advantageous for financial professionals and organisations in financial practices by emphasizing the criteria used to assess FRP and spending patterns in the past.

Keywords: Financial Behavior, Investment Decisions, Financial Risk Perception

View PDF