FINANCE AND INVESTMENT CHOICES: UNDERSTANDING THE INTERACTION OF FINANCIAL LITERACY, INCOME, EXPERIENCE, RISK TOLERANCE, AND EDUCATION

Abstract

This study investigates the impact of Financial Literacy, Income Level, Investment Experience, Risk Tolerance, and Education Level on Investment Decision Quality among young adults. A sample of 200 participants was analyzed using descriptive statistics, Pearson correlation, and multiple linear regression techniques. Results indicate that Financial Literacy is the most significant predictor of investment decision quality, with a strong positive correlation and high Beta coefficient in regression analysis. Investment Experience and Education Level also significantly influence decision quality, supporting their roles in improving investment outcomes. Risk Tolerance and Income Level have positive but comparatively lesser impacts. The findings highlight the crucial role of financial knowledge and practical experience in making informed investment decisions. Policies and programs aimed at enhancing financial literacy and investment experience are recommended to improve investment decision-making among young adults.