Effect of Financial Literacy and Risk Perception on Investment Choice

Abstract

The objective of this study wa s to assess the effect of financial literacy, and risk perception on investment choice. A quantitative design with a survey as a strategy was adopted, with a sample of 172 respondents. Data was analysed using one - way analysis of Variance (ANOVA) and Multi logistic regression. The resul ts from the ANOVA tests shows that although the differences in means were observed among investment choses , they were not statistically significant at 0.05% as the observed P - values were more than 0.05 ( 0.847, 0.889 and 0.263 ) , indicating that that Risk perception and financial literacy do not signif icantly affect investment choice. Further the findings show that 56% of the respondents chose real estate compared to 44% who chose financial assets an indication that individual investors in Zambia prefer real estate to financial assets. Unlike other stu dies, this study is unique in that it included real estate as part of the investment options and found that real assets are more preferred to financial assets in Zambia .