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|Impact of Behavioral Factors on Investment Decision-Making: Moderated Mediation of Locus of Control and Risk Tolerance
|Bussiness & Management
|Gomal University, D.I.Khan.
|The purpose of the present study is to examine the impact of behavioral factors on investment decision-making of Pakistan Stock Exchange. It also examines the moderating role of external locus of control and mediating role of risk tolerance on the relationship between behavioral factors and investment decision-making. The present study focuses on eight behavioral factors as independent variables. It includes: representativeness, availability bias, anchoring, overconfidence, gambler fallacy, regret aversion, loss aversion, and mental accounting additionally investment decision-making is taken as the dependent variable. This study is based on primary data. The data is collected through adapted questionnaires from individual stock investors of Pakistan Stock Exchange. The questionnaires were distributed through a convenience sampling technique. The total sample size is 385 stock investors. Both descriptive and inferential statistical techniques were applied to analyze the data. The study results revealed that there is a significant impact of behavioral factors on investment decision-making. Additionally, this study results presented that risk tolerance mediates the relationship between behavioral factors and investment decision-making. Furthermore, moderated mediation results indicated that the impact of representativeness, availability bias, overconfidence, gambler fallacy, regret aversion and mental accounting on investment decision-making through risk tolerance is moderated by an external locus of control, while the impact anchoring and loss aversion on investment decision-making through risk tolerance in not moderated by external locus of control. Keywords: Behavioral Factors, Representativeness, Availability Bias, Anchoring, Overconfidence, Gambler Fallacy, Regret Aversion, Loss Aversion, Mental Accounting, External Locus of Control, Risk Tolerance and Investment Decision Making.
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|PhD Thesis of All Public / Private Sector Universities / DAIs.
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|Muhammad Salman business adm 2022 gomal d i khan.pdf
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