A Project Report on

“Impact of Financial Literacy on

Investment Behaviour and Risk
Assessment Among Individuals”

Submitted in partial fulfillment of the

requirements for the award of the degree of

B. Com (Hons) Accounting

Submitted By:
Osman Anis Ahmad Submitted To:
23FM10BCM00086 Faculty Guide
[Link] Honors Department of Commerce
VI Semester, Section- B

MANIPAL UNIVERSITY JAIPUR

Department of Commerce
TAPMI School of Business
Faculty of Management, Commerce and Arts

Academic Year 2025–2026

Declaration
I hereby declare that the dissertation titled “IMPACT OF FINANCIAL LITERACY ON INVEST-
MENT BEHAVIOUR AND RISK ASSESSMENT AMONG INDIVIDUALS”, submitted in partial ful-
filment for the award of Bachelor of Business Administration degree from Manipal Univer-
sity Jaipur, is an authentic record of research work carried out by me under the supervision of
, during the academic year 2025 – 2026.
The matter embodied in this dissertation has not been submitted for the award of any other
degree or diploma. This work is entirely my own and has been conducted with academic in-
tegrity.

Date: Osman Anis Ahmad

Place: Reg. no. 23FM10BCM00086

i
Certificate
This is to certify that the dissertation titled “IMPACT OF FINANCIAL LITERACY ON INVESTMENT
BEHAVIOUR AND RISK ASSESSMENT AMONG INDIVIDUALS” submitted by Osman Anis Ah-
mad (Reg. no. 23FM10BCM00086), is a Bonafide record of original research work carried out
under my supervision and guidance for the partial fulfilment of the requirements for the de-
gree of Bachelor of Business Administration, Department of Business Administration, Manipal
University Jaipur.
The dissertation has been completed to my satisfaction and is approved for submission.

Supervisor’s Signature:
Department of Business Administration
Manipal University Jaipur

Head of Department’s Signature:

Head, Department of Business Administration
Manipal University Jaipur

ii
Acknowledgement
I express my sincere gratitude to , Department of Commerce, Manipal
University Jaipur, for their invaluable guidance, constant encouragement, and constructive feed-
back throughout the course of this research. Their expertise and unwavering support have been
instrumental in shaping this dissertation.
I am deeply thankful to the Department of Business Administration, Manipal University Jaipur,
for providing the necessary academic infrastructure and resources that enabled the successful
completion of this work.
I extend my sincere appreciation to all the respondents who participated in the survey. Their
time and honest responses have been the foundation of this study. I am also grateful to my
friends and classmates for their moral support and helpful discussions during the research pro-
cess.
Finally, I owe a profound debt of gratitude to my family for their unconditional love, patience,
and encouragement throughout my academic journey.

Osman Anis Ahmad

Reg. no. 23FM10BCM00086

iii
Abstract
Financial literacy is a very important factor in determining the investment decisions of individ-
uals who are faced with a complex financial market nowadays. Therefore, this paper aims at
studying how financial literacy affects the investment decisions of individuals. Financial literacy
can be defined as the knowledge and understanding of financial topics such as savings, various
investment alternatives, risk diversification, interest rates, and financial planning, which in turn
enable individuals to make smart and efficient financial decisions.
This dissertation focuses on the role of the level of financial knowledge in shaping investors’
attitudes, preferences, and decision-making processes when they choose different investment
paths. People who have a higher level of financial literacy are not only able to perform a proper
risk assessment but also tend to diversify their portfolios and select financial instruments that
meet their needs such as stocks, mutual funds, and fixed deposits. On the other hand, people
with low financial literacy may depend on informal advice only, make decisions influenced by
biases, or shy away from investing in profitable financial products.
The study was conducted using primary data obtained through a set of structured question-
naires administered to respondents from various demographic backgrounds. Statistical tools
were employed to explore the connection between financial literacy and investment behaviour.
Results reveal that knowledge of finance has a substantial impact on the selection of investment,
willingness to take risk, and making long-term financial plans.
Essentially, the paper argues that strengthening financial education and awareness is crucial
to facilitating better investment choices and a higher level of personal finance. Besides, the
work indicates that government, schools, and finance sector should work together to promote
programs for financial literacy that will ultimately help individuals to efficiently manage and
invest their money.

iv
Contents
Declaration i

Certificate ii

Acknowledgement iii

Abstract iv

List of Tables vii

List of Figures viii

1 Introduction 1
1.1 Background of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Problem Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Research Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Research Questions and Hypotheses . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Scope and Significance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2 Literature Review 4
2.1 Review of Relevant Past Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Theoretical Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Research Gaps Identified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Conceptual Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3 Research Methodology 6
3.1 Research Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Data Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Sampling Method and Sample Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Data Collection Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Analytical Techniques / Models Used . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Software Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

4 Data Analysis and Results 8

4.1 Demographic Profile of Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1.1 Age Distribution of Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1.2 Education Level of Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Awareness and Preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2.1 Awareness of Financial Literacy . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2.2 Preferred Investment Options . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Analysis of Financial Literacy Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3.1 Importance of Financial Knowledge in Investment Decisions . . . . . . . . . 9
4.3.2 Level of Risk Tolerance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3.3 Impact of Financial Literacy on Investment Decisions . . . . . . . . . . . . . 10
4.4 Document Analysis (Secondary Data Overview) . . . . . . . . . . . . . . . . . . . . . 10

v
5 Conclusion and Recommendations 13
5.1 Summary of Key Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.3 Recommendations for Practice and Policy . . . . . . . . . . . . . . . . . . . . . . . . 14
5.4 Limitations of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

References 15

vi
List of Tables
4.1 Age Distribution of Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Education Level of Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.3 Awareness of Financial Literacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 Preferred Investment Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.5 Importance of Financial Knowledge in Investment Decisions . . . . . . . . . . . . . 10
4.6 Level of Risk Tolerance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.7 Impact of Financial Literacy on Investment Decisions . . . . . . . . . . . . . . . . . 10

vii
List of Figures
4.1 Documents by Affiliation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Documents by Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Documents by Subject Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.4 Documents by Country or Territory . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

viii
Chapter 1

Introduction
1.1 Background of the Study

Today’s financial world is quite complicated and people are often faced with making difficult sav-
ings decisions, choosing investment options and planning their financial future. In fact, financial
literacy has become very indispensable as it determines how people manage their money and
pick the investment options. Financial literacy means having the knowledge and understand-
ing of financial concepts such as budgeting saving interest rates, risk diversification, inflation,
and different investment instruments. A financially literate person is capable of assessing fi-
nancial opportunities and making decisions that will enhance financial security and increase
wealth in the long-run. Financial literacy is highly relevant today as financial markets are ex-
panding rapidly and there are different types of investments available besides the traditional
ones such as stocks, mutual funds bonds’ fixed deposits, insurance products and even the new
digital investment platforms.
This however brings about the disadvantage of decision-making becoming a challenge due
to the increasing variety of financial products. This is further compounded by the fact that most
investors may not have enough knowledge of the financial market to be able to accurately as-
sess the risks and reward which may lead to making bad investment decisions, incur financial
losses or even losing out on opportunities for accumulating wealth. In this light, financial liter-
acy is very effective in equipping people to comprehend financial products and invest in them
wisely.
Studying the connection between financial literacy and investment choices is becoming more
important as people get involved more in the financial markets and the digital financial services
are getting larger. Knowing how financial understanding impacts investment behaviour can as-
sist decision-makers, trainers, and banks in creating the right financial education programs.
Besides, it can turn investors into self-assured and financially responsible managers. The pur-
pose of this article is to discuss the link between financial literacy and investment decisions as
well as how financial understanding changes investment behaviour. Through evaluating the
degree of financial knowledge and its implications on investment decisions the paper aims at
pointing out how financial education can enhance making financial decisions and lead to the
betterment of an individual’s finances.

1.2 Problem Statement

There are many investment opportunities available to people, but a lot of them can’t make good
decisions about investing because they don’t understand money and aren’t aware of how to
manage it properly. When people have very limited knowledge of money matters, they might

1
end up with really bad financial plans, not have enough money saved up, and still depend on
the usual or informal ways of investing. Besides, many people base their investments on advice
from their friends, family members, or other untrustworthy sources instead of doing a proper
analysis of the risks and benefits of different kinds of financial instruments. This situation of not
understanding well can stop individuals from reaching their financial objectives and amassing
wealth over time. As a result, it is crucial to explore how financial knowledge impacts people’s
investment decisions and whether enhancing people’s financial knowledge results in making
better decisions regarding their investments.

1.3 Research Objectives

- This study primarily aims to explore how well people understand financial matters.

- It also intends to see if there is any link between financial knowledge and investment de-
cisions.

- Besides that, it plans to find out what drives individuals to make certain investments.

- It further seeks to investigate the extent to which financial expertise influences one’s will-
ingness to take risks and their investment style.

- Last but not least, it proposes ways of upgrading financial educational and urging more
sensible investment habits.

1.4 Research Questions and Hypotheses

Research Questions

1. What is the current status of financial literacy among individuals?

2. In what ways does financial literacy alter investment decisions?

3. Are the investment behaviours of financially literate people different from those of less
literate ones?

4. Can financial literacy be connected to a person’s capacity to take risks when investing?

Hypotheses

H0 (Null Hypothesis): Financial literacy does not influence investment decision-making of in-
dividuals in a significant way.
H1 (Alternative Hypothesis): Financial literacy does make notable changes in investment decision-
making of individuals.

2
1.5 Scope and Significance

Scope of the Study

This research looks at the link between financial literacy and investment decisions of individuals.
It investigates the level of understanding of financial concepts by people and how this impacts
their selection of investment instruments such as savings accounts, fixed deposits shares mu-
tual funds, and other financial products. Primarily, the study focuses on individual investors
and their financial decision-making behaviour. The results are derived from the data collected
from the respondents through the questionnaires and might be confined to the selected sample
group only.

Significance of the Study

Financial literacy significantly contributes to enhancing the financial well-being of individuals,

and this constitutes the main point of this research. Understanding the interplay between fi-
nancial literacy and investment decisions, the research may serve to emphasize the necessity of
financial education. Besides, the outcomes of this study may serve as a guide to policymakers,
financial institutions, and educational organizations in developing initiatives that foster finan-
cial awareness. Increasing financial literacy can motivate individuals to make well-informed
investment decisions, handle risks competently, and be financially stable in the long run.

3
Chapter 2

Literature Review
2.1 Review of Relevant Past Studies

Some researchers have explored how financial literacy affects individuals’ investment decisions.
Being financially literate has been identified as one of the major factors that determine financial
behaviour, savings patterns, and investment decisions.
Lusardi and Mitchell (2014) demonstrated that those who have better financial knowledge
are inclined to do financial planning and to make investment decisions that are good. They
found that financially literate people usually have their investments in different areas and they
also have a better retirement plan.
Van Rooij, Lusardi, and Alessie (2011) examined how stock market participation is related to
financial literacy. The article showed that individuals with a good level of financial knowledge
are more inclined to investing in the stock market and other financial instruments than those
who lack such understanding.
Agarwal et al. (2015) studied the financial behaviour of investors and found that financial
literacy enhances one’s ability to manage risks and assess investment opportunities. The paper
pointed out that financially educated people are less likely to make irrational financial decisions.
Bhushan and Medury (2013), through their research on the financial knowledge of young
investors in India, discovered that a majority of the younger generation has a very restricted
understanding of various financial products, which in turn hampers their investment decisions
and financial planning.
In a similar vein, Chen and Volpe (1998) through their survey of college students and young
adults, found that these groups frequently do not have sufficient financial knowledge which
affects their financial and investment habit decisions.
In general, previous researches have demonstrated that financial literacy is a key factor in
increasing the effectiveness of investment decisions and achieving financial well-being. Those
who have a good understanding of finance are most likely to make more logical and well-
informed financial decisions.

2.2 Theoretical Background

Several financial and behavioural theories can be used to understand the relationship between
financial literacy and investment decisions.
Rational Choice Theory posits that people make decisions following a reasoned assess-
ment of the information at hand. So individuals with higher levels of financial knowledge are
more capable of evaluating the possible risks, returns, and available investment options before
making a financial decision.

4
 Behavioural Finance Theory is a good candidate to complement this theory since it points
at the fact that psychological elements and biases affect the way people make financial deci-
sions. For example, those with poor financial literacy are likelier to suffer from biases such as
overconfidence, herd behaviour, and emotional decision-making.
Modern Portfolio Theory (MPT) is yet another theory that indirectly emphasizes the value
of financial knowledge in investment decision-making. Basically, MPT argues that investors,
by spreading their investments around, can have less risk and more returns. With a proper
financial education, one can learn ways to diversify the investment portfolio and also how to
effectively manage risk.
So these theories overall suggest that having financial literacy is very important as it enables
people to make well-informed and wiser investment decisions.

2.3 Research Gaps Identified

Many studies have researched the connection between financial literacy and investment be-
haviour. Still, there remain some open areas to be further explored:

- A number of research papers highlight one or few developed countries, while developing
economies such as India have attracted less attention.

- There are situations where only a restricted group such as students or professionals are
the subjects of the study, thereby limiting the applicability of findings to the general pop-
ulation.

- Financial knowledge is usually the main focus of the research. However, factors such as in-
come, education level, age, and risk tolerance can also play a role in investment decisions.

Therefore, this paper aims to fill the mentioned research gaps by studying how financial literacy
affects investment decisions of people coming from different backgrounds.

2.4 Conceptual Framework

The conceptual framework of the research considers financial literacy and investment decisions
as the main variables. Here, financial literacy will be the independent variable and investment
decision the dependent variable. Financial literacy comprises different elements like financial
knowledge, financial awareness, financial skills, and financial attitude. Together, these aspects
measure a person’s ability to interpret financial data and weigh investment options. Financially
literate persons can better study various investment options, grasp the risk and return aspects,
and make the right choice. In contrast, financially illiterate persons will probably have difficulties
in assessing financial products and may resort to informal advice or traditional savings. Thus,
the structure proposes that raising financial literacy can upbeat the investment decision-making
quality of the individual.

5
Chapter 3

Research Methodology
3.1 Research Design

Research design is the plan on how to carry out a research project. A good plan provides a frame-
work which logically and consistently connects the different parts so the research problem that
is being addressed can be effectively solved. This research is a combination of descriptive and
analytical type. The purpose of the descriptive part is to identify the level of financial literacy
of people, and the study will also find out how peoples investment decisions and financial be-
haviour are affected by their level of financial knowledge. The study is quantitative in nature.
Data in the form of numbers is gathered and analysed to discover the trends and connections
between financial literacy and investment decision-making.

3.2 Data Sources

To fulfil the research objectives, the study utilizes two types of data, namely primary and sec-
ondary data.
Primary Data is gathered straight from the respondents through a well-designed question-
naire. The questionnaire covers questions on financial literacy, investment likes, risk inclination,
and the behaviour of individuals in making financial decisions. Since primary data offers fresh
information, it is instrumental in comprehending the real level of financial knowledge and the
way people invest in them.
Secondary Data serves to back up the study by offering a theoretical foundation and knowl-
edge gained from earlier works. Secondary data is collected from various published and reliable
sources such as:

- Research journals and academic publications

- Books related to finance and investment

- Reports from financial institutions

- Government publications

- Financial literacy reports and articles

3.3 Sampling Method and Sample Size

The study adopts the convenience sampling method that allows selecting the respondents by
their availability and willingness to participate in the survey. This method has always been a

6
popular choice for academic researchers mainly because of the constraints regarding time and
resources. The respondents may be different kinds of people with various educational and pro-
fessional backgrounds including students, working professionals, and self-employed individu-
als. The final sample consisted of 100 participants. This sample size is adequate to carry out the
analysis of the variations and associations between financial literacy and investment behaviour.

3.4 Data Collection Tools

The main tool of data collection in this research was a structured questionnaire. The majority
of the questions were prepared based on multiple-choice and Likert scale format allowing the
measurement of the level of agreement or knowledge of the responses. The questionnaire was
sent out through social media platforms to get the responses directly from the respondents.

3.5 Analytical Techniques / Models Used

Various statistical methods have been employed to carry out the analysis of the study data:

1. Descriptive statistics help in summarizing the data and outlining the features of the sam-
ple. These approaches give insights into the demographic characteristics of the respon-
dents as well as their level of financial literacy.

2. Correlation analysis is conducted to study whether financial literacy and investment de-
cisions are related. The analysis will reveal if improved financial literacy actually translates
to positive changes in investment behaviour.

3. Comparative analysis is a method to identify financial literacy disparities among different

categories, such as age, education, and income levels.

3.6 Software Tools

The data collected from the questionnaire is organized and analysed using Microsoft Excel. Ex-
cel is used for:

- Data entry and organization

- Calculation of percentages and averages

- Creation of charts and tables

- Basic statistical analysis

7
Chapter 4

Data Analysis and Results

This chapter presents the analysis and interpretation of the data collected from respondents
through a structured questionnaire. The objective of this analysis is to understand the relation-
ship between financial literacy and investment decision-making among individuals.
The data collected from 100 respondents has been analysed using percentage analysis and
descriptive statistics. The results are presented through tables, charts, and interpretations for
better understanding.

4.1 Demographic Profile of Respondents

4.1.1 Age Distribution of Respondents

Table 4.1: Age Distribution of Respondents

Age Group Number of Respondents Percentage

18–25 45 45%
26–35 30 30%
36–45 15 15%
ABOVE 45 10 10%
TOTAL 100 100%

Interpretation: The majority of respondents (45%) belong to the 18–25 age group, indicat-
ing that young individuals are more interested in financial literacy and investment awareness.

4.1.2 Education Level of Respondents

Table 4.2: Education Level of Respondents

Education Level Respondents Percentage

Undergraduate 50 50%
Postgraduate 30 30%
Professional Courses 15 15%
Others 5 5%
TOTAL 100 100%

Interpretation: Most respondents (50%) are undergraduates, showing that financial liter-
acy awareness is increasing among students and young learners.

8
4.2 Awareness and Preferences

4.2.1 Awareness of Financial Literacy

Table 4.3: Awareness of Financial Literacy

Awareness Level Respondents Percentage

Highly Aware 35 35%
Moderately Aware 40 40%
Slightly Aware 20 20%
Not Aware 5 5%
TOTAL 100 100%

Interpretation: The results show that 75% of respondents have moderate to high financial
awareness, indicating that financial literacy is gradually improving among individuals.

4.2.2 Preferred Investment Options

Table 4.4: Preferred Investment Options

Investment Option Respondents Percentage

Mutual Funds 35 35%
Fixed deposit 25 25%
Stock market 20 20%
Gold 10 10%
Others 10 10%
TOTAL 100 100%

Interpretation: Most respondents prefer mutual funds (35%) and fixed deposits (25%) due
to their relatively lower risk and stable returns.

4.3 Analysis of Financial Literacy Factors

4.3.1 Importance of Financial Knowledge in Investment Decisions

Interpretation: A large majority (80%) of respondents agree that financial knowledge plays
an important role in making investment decisions, indicating a strong relationship between
financial literacy and investment behaviour.

4.3.2 Level of Risk Tolerance

Interpretation: Most respondents (50%) prefer moderate-risk investments, suggesting that

individuals seek a balance between risk and return.

9
 Table 4.5: Importance of Financial Knowledge in Investment Decisions

Response Respondents Percentage

Strongly Agree 50 50%
Agree 30 30%
Neutral 10 10%
Disagree 7 7%
Strongly Disagree 3 3%
TOTAL 100 100%

Table 4.6: Level of Risk Tolerance

Risk Level Respondents Percentage
High Risk 15 15%
Moderate Risk 50 50%
Low Risk 35 35%
TOTAL 100 100%

4.3.3 Impact of Financial Literacy on Investment Decisions

Table 4.7: Impact of Financial Literacy on Investment Decisions

Impact Level Respondents Percentage

High Impact 55 55%
Moderate Impact 30 30%
Low Impact 15 15%
TOTAL 100 100%

Interpretation: The results indicate that 55% of respondents believe financial literacy strongly
influences their investment decisions, confirming that financial knowledge helps individuals
make better financial choices.

4.4 Document Analysis (Secondary Data Overview)

Interpretation: The bar chart in Figure 4.1 displays the number of documents published by var-
ious academic institutions. Bina Nusantara University has the most publications, making it the
most active university in this field. Amity University, Universiti Teknology Malaysia, and Christ
University follow. Overall, the data shows that while Bina Nusantara University is highly en-
gaged in this research area, several other institutions across different countries also contribute
to the field.
Interpretation: The pie chart in Figure 4.2 shows the distribution of documents by type. Ar-
ticles make up the vast majority of the documents (82.8%), indicating that journal articles are the
primary medium for disseminating research. Conference papers represent the second-largest

10
 Figure 1: Documents by Affiliation (Bar Chart)
A chart showing publication frequency by institutions.

Figure 4.1: Documents by Affiliation

Figure 2: Documents by Type (Pie Chart)

A chart breaking down types of published documents.

Figure 4.2: Documents by Type

document type (8.9%). In summary, the data reveals a strong preference for journal articles and
conference papers, reflecting a focus on original research and active academic dialogue.

Figure 3: Documents by Subject Area (Pie Chart)

A chart displaying major research fields.

Figure 4.3: Documents by Subject Area

Interpretation: Figure 4.3 highlights the distribution across various subject areas, with Eco-
nomics and Econometrics (26.4%) and Business, Management, and Accounting (24.5%) emerg-
ing as the most dominant fields. Social Sciences (13.8%) also hold a significant share. This
distribution highlights a balanced yet economically and socially driven research focus.
Interpretation: The bar chart in Figure 4.4 presents the number of documents produced by
different countries. India stands out as the leader, followed by Indonesia. The United States and
China occupy the third and fourth positions, respectively. This distribution highlights India and

11
 Figure 4: Documents by Country or Territory (Bar Chart)
A chart highlighting global research contributions.

Figure 4.4: Documents by Country or Territory

Indonesia’s dominance in document production, reflecting their focus on this specific research
area.

12
Chapter 5

Conclusion and Recommendations

5.1 Summary of Key Findings

The research examined the impact of financial literacy on investment decisions among individ-
uals using data collected from 100 respondents. The analysis of the collected data revealed
several important findings:

- A large proportion of respondents belong to the 18–25 age group, indicating that younger
individuals are increasingly interested in financial awareness and investment opportuni-
ties.

- The majority of respondents possess moderate to high levels of financial literacy, suggest-
ing that financial awareness among individuals is gradually improving.

- Mutual funds and fixed deposits are the most preferred investment options due to their
perceived stability and relatively lower risk.

- A significant majority of respondents agree that financial literacy plays an important role
in investment decision-making.

- Individuals with higher financial knowledge tend to show better understanding of risk,
return, and diversification in investment decisions.

- Most respondents prefer moderate-risk investment options, indicating a balanced approach

between risk and return.

5.2 Conclusion

Based on the analysis of the collected data, it could be said that financial literacy has a major ef-
fect on people’s investment decisions. Those who have a good knowledge of financial matters
are better able to assess various investment options, comprehend financial risks, and make
well-informed financial decisions. Understanding finances empowers people to create more
effective financial plans, to have a variety of investments, and to steer clear of the most com-
mon financial errors. On the other hand, people who are not very good with money might get
their information from unreliable sources, or make investment decisions based on speculation
and market rumors. Hence, elevating financial literacy levels is the key to fostering responsi-
ble financial behavior and enabling individuals to engage more effectively in financial markets.
Raising financial consciousness would lead to better personal financial management and a fi-
nancially secure future.

13
5.3 Recommendations for Practice and Policy

Drawing from the outcomes of this research, these are the recommendations:

1. Financial Education: Schools should teach financial literacy as part of their lessons so
that students gain foundational financial knowledge early.

2. Awareness Campaigns: Banks and government bodies should conduct awareness pro-
grams and training sessions to make people financially literate and able to do investment
planning.

3. Digital Financial Education: The internet, mobile devices, and social media can be utilized
to disseminate financial literacy and investment advice to an extensive audience.

4. Investor Protection Measures: Stock market regulatory bodies should introduce stricter
rules safeguarding investors against financial scams and false investment offers.

5. Encouraging Long-Term Investment: The focus of investors should be on financial plan-

ning for a longer period and not short-term speculative investments.

5.4 Limitations of the Study

Though it offers some helpful perspectives, the study has a few limitations:

- Firstly, the study mainly included 100 respondents, which might not be sufficient to repre-
sent the whole population.

- Secondly, this research is based on self-reported information, which may probably be in-
fluenced by one’s personal biases or even contain errors.

- Thirdly, it investigates chiefly individuals’ views on financial literacy instead of rather deeply
assessing their actual financial knowledge.

- Lastly, the time and resource limitations had to be imposed on the width of data collecting.

14
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