EFFECT OF FINANCIAL LITERACY ON INVESTMENT DECISIONS: A CASE OF KATHMANDU VALLEY

Abstract

This study examines the effect of financial literacy on investment decisions: a case of Kathmandu valley. The study has used descriptive and casual research design. The sampling technique for the study followed convenience sampling. Data have analyzed by using different statistical technique such as descriptive statistic, correlation analysis and regression analysis. This study found that investors agreed that financial knowledge and financial skill highly affects their investment decision of investors and they believe that their decision is also high. The correlation analysis revealed that the correlation analysis reveals that shows that there is significant position association between financial knowledge and investment decision. Similarly, financial attitude has significant positive relationship with investors’ investment decision. At the same time, there is significant positive association between financial skill and investment decision. Moreover, financial awareness and financial behavior have significant positive relationship with investment decision. The regression analysis showed that there is significant positive effect of financial knowledge on investment decision. Then, there is also significant positive effect of financial attitude on investment decision. At the meantime, financial skill has significant positive impact on investment decision. Finally, financial awareness and financial behavior have significant positive effect on investment decision. However, financial literacy has significant impact on investors’ investment decision in Nepalese stock market.