Risk tolerance and financial investment decision of customers in nepalese commercial banks

Abstract

This study investigates the relationship between risk tolerance and financial investment decisions among customers of three Nepalese commercial banks: Nabil Bank, Everest Bank, and Rastriya Banijya Bank. The main objective of the study is to examine how different types of risk tolerance—namely financial, capital, and speculative risk tolerance—along with demographic factors such as age, gender, marital status, education, income, and profession, influence individual investment behavior. A quantitative research approach was employed, using structured questionnaires with a five-point Likert scale distributed to a sample of 400 bank customers. Data were analyzed using statistical techniques including correlation, regression, and ANOVA to assess the strength and significance of the relationships between variables. The findings reveal a significant positive relationship between financial risk tolerance and investment decisions, indicating that individuals with higher risk tolerance are more likely to make active and larger investments. Similarly, capital and speculative risk tolerance were also found to influence investment behavior positively.

Keywords:- Financial investment decisions, capital risk tolerance and speculative risk tolerance.