Impact of Investment Characteristics on Perceived Risk and Return: A Case of Pakistan Stock Exchange

Abstract

This study investigates the relationship among investment experience, investment information, investment duration, risk propensity, risk perception, expected return and individual investors’ financing behaviour in the context of Pakistan stock exchange. The study utilised an adapted questionnaire to collect the data from 421 Pakistani individual investors. Past investment experience, investment information and investment duration have significant impact on risk perception as t-value is greater than 1.96 and p-value less than 0.05. Risk perception has significant impact on risk propensity as t statistics is 19.447 and risk propensity has significant impact on expected return as p-value is less than 0.05. In addition to this, by taking risk propensity and risk perception as mediating variable, the results show that investment experience, investment information and investment duration have significant impact upon expected return.