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The purpose of this paper is to determine relationships between financial risk tolerance and the personality traits of sensation-seeking, locus of control, ambiguity tolerance, and financial dishonesty.

A pretested questionnaire was used to gather information from 255 respondents. With risk tolerance as a criterion variable and the four personality traits as predictor variables, a regression procedure was performed to determine which variables contributed to the variability of the criterion variable and the extent of such contribution. An analysis was also done to find out whether gender, age, GPA, and academic standing had an influence on each personality trait’s contribution to risk tolerance.

Risk tolerance is directly related to sensation-seeking and the link is so strong that it is not mitigated by the effects of gender, age, GPA, and college academic standings. As for locus of control, the more one believes one has control over one’s outcome, the higher risk one can tolerate. Surprisingly, there is no relationship between risk and ambiguity tolerances. Dishonesty also does not affect risk tolerance behavior. However, the relationship is found to exist among younger individuals and those with lower GPA, possibly due to not having reached an adequate level of matured or critical reasoning yet.

The relationship between risk tolerance and sensation-seeking is an established fact but whether the relationship still holds across several demographic groups is part of this study’s focus. Although much has been done on risk tolerance, very little has been done on its relationship to locus of control, ambiguity tolerance, and financial dishonesty.

This research aims to examine the decision-making process involved in saving for retirement and compare it with decision-making processes regarding other financial products (such as loans and savings plans) as well as real products (such as a car or a home).

This research is based on the distribution of 107 questionnaires. The questionnaire is composed of two parts: questions examining and focusing on the individual’s decision-making process and questions regarding socioeconomic factors. The average level of risk tolerance is calculated for each respondent with respect to the first four chapters. (These chapters include buying a car or a home, opening a savings plan and taking a loan). Afterward, the consistency (rationality) of the respondents is examined with regard to their decision-making concerning retirement savings plans. Then, an econometric model is used to further test the consistency of the respondents.

The results suggest that the level of risk tolerance associated with a retirement savings plan is consistent with that associated with the other financial products, but not with the real products. Majority of the respondents demonstrate high risk tolerance with respect to retirement savings, and their decision-making process is similar to a random thinking process. The level of deliberation and information-gathering regarding retirement savings is the lowest when compared with the other financial and real products examined in this paper. Majority of the respondents are less risk-tolerant toward the other financial and real products.

In this research, the authors examine how different individuals with different characteristics get different decisions about their personal retirement savings. The authors also examine these decisions’ deviation from the rational model, and compare it with decision-making processes regarding other financial products as well as real products.

This paper sets out to corroborate the existing literature on investors' risk tolerance and to assess how the 2008 financial crisis has affected risk tolerance among Italian investors.

Based on a unique dataset of real-world portfolio choices made by 1,245 Italian investors over a period of 15 years (from 2003 to 2017), this paper presents two steps of analysis. In step 1, the whole period 2003–2017 is considered with the aim to integrate and corroborate the existing literature on the topic of risk tolerance, considering a complete economic and financial cycle. Step 2 took 2008 as the pivotal point between pre-crisis (2003–2008) and crisis (2009–2017) with the aim to observe the influence on risk appetite of the economic and financial effects of the crisis.

The results obtained confirm that men are more risk tolerant than women and older people are less risk-taking than their younger counterparts, although the relationship between age and risk tolerance is not necessarily linear. Moreover, our paper demonstrates that a crisis scenario has an influence on Italian investors' risk tolerance.

Our results are of interest to financial advisors, financial planners, asset managers, psychologists, behavioral researchers and more in general to providers of financial products and services.

The results presented in this paper are relevant and original because they are based on real investors who made real choices concerning their portfolio asset allocations.

The vast amount of information available via online social networks (OSN) makes it a very good avenue for understanding human behavior. One of the human characteristics of interest to financial practitioners is an individual’s financial risk tolerance. The purpose of this paper is to look at the relationship between an individual’s OSN behavior and his/her financial risk tolerance.

The study uses data collected from a sample of 220 university students and the backward variables selection ordinary least squares regression analysis technique to achieve its objective.

The results of the study find that the frequency of logging on to social network sites indicates an individual who has higher financial risk tolerance. Additionally, the increasing use of social networks for social connection is found to be associated with lower financial risk tolerance. The results are mostly consistent when the sample is split based on prior financial knowledge.

To the authors’ knowledge this is the first study which documents the possibility of understanding an individual’s financial risk tolerance via his/her social network activity. This provides investment/financial consultants with more avenues for gathering information in order to understand their current or potential clients hence providing better services.

Currently, few academics agree on a standard and scientific way to measure risk tolerance. This paper aims to create a unique model for empirically measuring risk tolerance and to make a strong contribution to the growing literature in risk tolerance and risk management.

The authors use factor analysis and regression analysis to identify relevant factors for measuring risk tolerance.

The risk tolerance model is based on the acronymed model riskTRACK, which includes the five significant factors this paper identifies for measuring risk tolerance: traditional risk factor, reflective risk factor, allocation risk factor, capacity risk factor and knowledge risk factor.

Uses for future research streams devoted to risk tolerance and risk management.

The results also have practical applications for the financial services industry, particularly risk management, portfolio management and financial planning.

In sum, this research expands previous research in risk tolerance and also adds to the growing literature in risk management. Once again, this paper is unique in that the authors develop a valid and reliable risk tolerance model based on five specific factors for measuring risk tolerance.

We analyze the correlation between the political orientation of investors and their financial risk tolerance. Assessing financial risk tolerance is a very important aspect to developing an appropriate long‐term investing strategy. Our study is based on a sample of 129 undergraduates at Central Michigan University during one academic year. We employ a two‐axis political compass to determine the political orientation of our study participants. We determine their financial risk tolerance by analyzing their portfolios and trading behavior in a simulated investment game in a semester long course. We report two main findings: (1) financial risk tolerance is highest for those with more conservative economic political views and (2) financial risk tolerance is highest for those with more centrist social political views. We believe our results can help investment advisors and individual investors better assess individual financial risk tolerance through the use of the two‐axis political compass utilized in our study.

The study attempts to assess the relationship between sociodemographic factors and the risk tolerance level of stock market investors reflected by their trading behavior from the perspective of developing market economy.

The study collected data from a survey on capital market investors in Bangladesh. Portfolio beta has been used as a dependent variable to measure the risk tolerance level where total 11 sociodemographic factors have been used as independent variables.

Among all study variables, three sociodemographic factors are found to be significant in differentiating the risk tolerance level of the stock market investors. The author finds that the risk tolerance level of stock market investors significantly varies according to marital status, family size and financial responsibility.

As sociodemographic characteristics provide a basis in assessing the investor risk tolerance level in the context of developing market economies, the study suggests that stock market related policy and investment management planning process should be formulated by incorporating behavioral aspects of the retail investors.

This study has the potential to contribute to the behavioral finance literature by showing how and at what extent sociodemographic factors may influence the risk tolerance level of stock market investors in developing countries, where sociodemographic factors are considered to be more dominating than the normative portfolio selection procedure because of lacking in investors' financial literacy and due to the presence of a weak regulatory as well as institutional framework. Further, apart from identifying and comprehensively incorporating all possible sociodemographic factors, this study uses portfolio beta as a new objective measure for financial risk tolerance, which overcomes the problem of subjective and other risk tolerance measurement in the existing literature.

This study aims to analyze how risk tolerance is influenced by bull and bear market phases, age and professional work experience (PWE) of investors in emerging economies. The authors also analyze how different market phases (bull and bear) influence risk tolerance of investors in emerging economies for different age groups and with varying PWE.

The study uses two quantitative methods, one-way ANOVA and hierarchical regression model (HLM) to analyze individual investors' financial risk tolerance (FRT) in India.

The authors find that age and PWE have positive relationship with FRT behavior. However, interactions of these variables with market phase variable indicate that risk tolerance has nonlinear increasing relationship with investor's age and PWE. The risk tolerance of older investors is consistently high in both bull and bear market conditions, while young investors display a nonlinear risk behavior in different market conditions.

The study suggests that financial planners should include a longitudinal risk profiling of investors based on age groups, PWE and the current market phase to better understand investors' FRT and also to prefer more context-specific advice to investors in emerging economies, which, consequently, result in increasing the retail investors' interest in otherwise sparsely participated equity market.

Interaction effect of bull and bear market phases on relationship between age and PWE and FRT has been scantly studied.

This paper examines students' decisions when playing an in-class version of the TV game, Deal or No Deal (DOND), to study the relation between personal characteristics and individual decision-making under risk.

This study analyzes DOND game play data collected from 374 students in 13 university finance classes, and their personal characteristics collected in a post-game survey. It uses ordered probit, OLS and probit regression analysis to examine the impact of personal characteristics on an individual's risk tolerance.

The key finding is that international students are significantly more risk averse than US domestic students. Additionally, given the natural control for age and education, the study finds that gender, race and religion have a limited impact on an individual's risk tolerance. Finally, the study provides evidence that the structure of the DOND game, in general, rewards risk-taking as long as it is not excessive. Once participant behavior becomes risk-seeking, the correlation between risk-taking and game payoff becomes negative.

The homogeneous set of contestants (business students) analyzed in this study presents some limitations yet provides opportunities to examine risk tolerance differences between the US and international students, and whether gender, race or religious affiliation has an impact on the level of risk tolerance given a natural control for age and education level.

The evidence suggests that culture and environmental unfamiliarity may impact an individual's risk tolerance. This finding is useful when providing financial advice to diverse clients or when conducting international business. Additionally, understanding that education and financial literacy reduces differences in risk tolerance across gender, race and religion can impact the way we interact with others. A broader practical implication for all investors is that, while under normal circumstances, risk-taking is rewarded with a higher expected return, excessive risk-taking may harm their investment performance.

This paper utilizes a unique data set, collected through a class activity and post-class survey. While there have been empirical studies using DOND data, this is the first study that examines the impact of personal characteristics on game participants' behavior, thereby generating unique findings not reported in previous studies employing DOND data.

The purpose of this study is to examine a mechanism through which subjective financial literacy can exert negative effects on the retirement saving intention and behaviors, which has not been well understood in prior research. Particularly, the authors draw on the relevant risk literature to introduce financial risk tolerance and risk perception as important mediators that transfer subjective financial literacy into reduced retirement saving intention which in turn affects the saving behaviors.

The authors test the model with a sample of 347 adults using factor analysis and structural equation modeling.

Consistent with the notions about the negative side of subjective financial literacy, the authors find supporting evidence for the proposed indirect effects of financial literacy on retirement saving intention via risk tolerance and risk perception. In addition, the authors observe that an individual's retirement saving intention strongly predicts their retirement saving behaviors.

The study offers insights into the mechanisms that subjective financial knowledge might also inhibit individual's responsible financial behaviors (e.g. retirement saving).