Profiling the Risk Tolerance of Higher Education Students in Zambia

Here is overwhelming consensus among researchers that investment behaviour is anchored on tolerance towards risk. Therefore, all strategies and policies intended to promote investment behaviour should be anchored on understanding the Financial Risk Tolerance (FRT) profile of the target group. The current study sought to profile the FRT of higher education students as a key target group for future economic wellbeing and investment performance in Zambia. The FRT profile will help to understand the extent to which higher education students are willing to take on risk, thus, appropriate strategies and policies can be formulated to influence desirable investment behaviour. The study adopted the descriptive research design to systematically describe the FRT of higher education students. Data was collected from final year masters students at University of Lusaka using an electronic questionnaire.Descriptive statistics was used to analyse the data. The study established that higher education students have an aggressive attitude towards risk. This means that higher education students are predominantly willing to take on more risk. Coupled with appropriate motivation from policy makers and other stakeholders such as investment companies, higher education students are good agents for economic emancipation through active involvement in investment activities in Zambia. The study recommends that policy makers should create an enabling environment that promotes and enables the prospective investors to take on the desirable level of risk through investments. It is also recommended that other stakeholders such as investment companies should design financial products that exhibit ownership characteristics or stock like properties, if they are to have sufficient business relationships with this market segment.