INVESTOR'S PERCEPTION TOWARDS RISKRETURN IN INDIAN STOCK MARKET: AN EMPIRICAL ANALYSIS

Behavioural Finance is an advancing field, with limited research in understanding the perception of investors regarding their decision. Some various factors and biases compel an individual to take an irrational decision due to the presence of unforeseen probability of gain and loss, an element of risk. Also, with globalization and innovation, the market has increased in size and has made investment decision a complex process. The study employs primary data in discovering the behavioral biases that affect the risk and return perception of retail investors, and the association between demographical factors and investment decision. Through factor analysis, the study found out 10 factors mainly, overconfidence, herding and market factors, and an evident association between gender and investment decision and no association with an occupation, through Chi-square test. Ranking Test was used to determine the notable sources that investors keep in mind before investing i.e. Company statement and EPS. These results suggest evidence of potential biases in the decisions of investors. On this basis, an investor should be self-aware of his/her biases and consciously tackle it to make an informed decision.