Financial knowledge and subjective financial risk tolerance among students at a South African University

Abstract

This study used a self-administered questionnaire to determine the effect of financial knowledge and other demographic variables on Financial Risk Tolerance (FRT) among South African University students. Descriptive statistics and a binary logistic regression model were used to analyse information from 330 participants selected from a South African University in the Gauteng province. The results indicated that the probability of being risk tolerant was high among students with financial knowledge compared to those without financial knowledge. Among demographic variables, monthly expenditure and religion were found to have a significant effect on Financial Risk Tolerance. The results of the study thus draw attention to a number of factors that can help investment managers in finding suitable financial products for their clientele.