A study on the influence of undergraduate students’ traits and psychological biases on their trading behaviours.

• Main Authors: Tan, Celestine., Tay, Shu Yun., Toh, Mei Siew.
• Other Authors: Lau Sie Ting
• Format: Final Year Project
• Language: English
• Published: 2012
• Subjects: DRNTU::Business::Finance::Investments
• Online Access: http://hdl.handle.net/10356/48332
• Institution: Nanyang Technological University

This study investigates the overconfidence and risk tolerance level of undergraduate students and their influence on undergraduates’ trading behavior. The main objective is to discover the factors affecting the level of overconfidence and the impact of gender on the risk tolerances of the undergraduate students. We further aim to understand how the degree of overconfidence and risk tolerances would affect the trading behaviors of undergraduate sutdents. A survey, including a trading game was conducted on 192 respondents. All our hypotheses were supported in our study. Likely explanations for the strong relationships are explained in the discussion of findings. This study allows for the better understanding of the investment behaviors of undergraduate students. This is integral as there is an increasing trend of them investing and they will eventually form the group of full time investors. The main limitation of this study is that we are unable to reenact a real trading scenario as actual, precise market trading data of the undergraduates would be unavailable. Future research should be conducted on a larger scale over a longer time frame to allow for the use of real market trading data.