Females are more risk averse than males Generally, in today’s society female control the day-to-day finances of their household and may not have much experience on investing. According to Arano (2010), did a sample test on males and females, and the result have proven that females tend to be more risk averse because they lack on financial knowledge and experience than males. There are couple of researches that suggested, as financial knowledge and wealth increases,...
Females are more risk averse than males
Generally, in today’s society female control the day-to-day finances of their household and may not have much experience on investing. According to Arano (2010), did a sample test on males and females, and the result have proven that females tend to be more risk averse because they lack on financial knowledge and experience than males. There are couple of researches that suggested, as financial knowledge and wealth increases, am individuals risk aversion decreases.
Females with identical knowledge, confidence and experience may exhibit alike risk to males.
There is a term called “risky shift”, which is when 10 individuals are placed in a group and swap their observations to more of a risky decision (Cartwright, 1973). This may be due to the person confidence level being very poor just in case they choose the wrong option for the investment. This however is a diffusion of responsibility.
To measure risk taking behaviour of the groups, the group’s initial investment was used. As these participants where finance and accounting students, they were currently studying the International finance and risk management. This may have an impact on the hypothetical assignment that they will carry out, as they will have more knowledge on the international markets, currencies and its current economic condition. This will help the participant determine how much to invest and what market.
