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Effect of Financial Literacy on Students’ Investment Behaviour in Nairobi Securities Exchange. A Case of United States International University-Africa

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dc.contributor.author Muhoza, Doriane
dc.date.accessioned 2020-02-06T08:21:21Z
dc.date.available 2020-02-06T08:21:21Z
dc.date.issued 2019
dc.identifier.uri http://erepo.usiu.ac.ke/11732/5353
dc.description A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirements for the Degree of Maters of Business Administration (MBA) en_US
dc.description.abstract The purpose of the study was to determine the effect of financial literacy on university students’ investment behavior in Nairobi securities exchange. The study was guided by the following research questions; what are the behavioral factors affecting student’s investment behavior? what is the effect of financial knowledge on student’s investment behavior? and how does personal financial management affect student’s investment behavior? The study adopted the use of an explanatory research design. The target population included both graduates and undergraduate students in United States International University-Africa, totaling to 7,005 students. The study adopted the use of simple random sampling technique. The sample for this study was 378 both graduates and undergraduates’ students. The study used questionnaires which was the main instrument for collecting the primary data required for the study. Descriptive and inferential statistics technique was used to analyze data. Data was first coded before analysis and Statistical Package for Social Sciences (version 24) computer software was used for analyzing the data. The findings were presented in frequency tables, percentages and graphs. The findings of the study indicated that students are risk taker when it comes to investment decision and they can influence decisions making behavior which increases the chance of choosing a higher risky investment. Male students are more risk takers than female students and that the perception of risk influence students investing behavior this is because they have more financial knowledge in their investment decisions in the NSE. The results of the study for the correlation analysis between behavioral factors and investment behavior variables indicated a strong relationship between behavioral factors and investment behavior. The results showed that financial behaviors and financial knowledge contribute to financial satisfaction for students and that economic status of parents has a significant direct effect on financial management. The findings of the study on the correlation and regression analysis between financial knowledge and investment behavior. There was a strong relationship meaning that changes in financial knowledge are strongly correlated with changes investment behavior. The findings showed that financial management knowledge is the key of financial decision making and as the student they have higher financial management skills in using resources cost effectively. The results of the study showed that correlation analysis between financial knowledge and investment behavior variables had a strong relationship meaning that changes in financial management are strongly correlated with changes investment behavior. The study concludes that investor sentiment, and overconfidence behavior significantly affect investment behavior of university students. It can also be concluded that male students are more risk takers than female students and that the perception of risk influence students investing behavior. Secondly, level of financial knowledge of university students influence the investment decisions they make. Financial behaviors and financial knowledge contribute to financial satisfaction for the university students and that economic status of parents has a significant direct effect on financial management. Thirdly, students in the university are financially educated which has minimized their spending behaviors and male students have more financial management skills than female student. This has made them to have positive attitude towards investment in the Nairobi Securities Exchange. The study recommends that university students should get the relevant education which is important to overcome uncomfortable investment outcomes caused by behavioral biases. Secondly, students should invest in building financial literacy as higher financial literacy is positively related to successful investment decisions. Lastly, the university should offer free short courses on student’s financial management this is because financially well-educated students make superior decisions for themselves and that financial skills will help them to manage financial needs according to their resources. Further researchers should base study on a bigger sample to include public universities which will make in generalizing the findings of the study on university student’s investment behavior. The study recommends for further studies that more variables should be studied such as risk tolerance, psychological influence on investment decisions. en_US
dc.language.iso en en_US
dc.publisher United States International University - Africa en_US
dc.subject Financial Literacy en_US
dc.subject Students’ Investment Behaviour en_US
dc.subject Nairobi en_US
dc.subject Nairobi Securities Exchange en_US
dc.subject United States International University-Africa en_US
dc.title Effect of Financial Literacy on Students’ Investment Behaviour in Nairobi Securities Exchange. A Case of United States International University-Africa en_US
dc.type Article en_US


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