4.6, Two Factors Were Derived For The Extent Of Investment In The Capital Market
From the table 4.6, two factors were derived for the extent of investment in the capital market. Factor 1 is extent of investment decision under which item EID_1, EID_2, EID_3, EID_4, EID_5 and EID_6 are grouped. Factor 2 is extent of investment behavior under which EIB_1, EIB_2 and EIB_3 are grouped. Two factors explain 48.7% of the variance and cronbach alpha value ranges from .639 to .801. Cronbach alpha value falls in the range of .503 to .740 that implies a high reliability of the scale.
From the Table 4.7, it is observed that there is a moderate positive correlation among overconfidence, herd behavior, risk tolerance and the extent of investment in the capital market using the pearson correlation. The correlation between overconfidence …show more content…
It was used to test if the extent of investment in the capital market is predicted by overconfidence bias, herd behavior bias and risk tolerance bias. Here, R represents the multiple correlation coefficients that measure the strength and direction of a relationship between the variables. It ranges from -1 to +1. R value reflects the score of .537, which states that the total extent of investment in capital market has a positive relationship with independent variables such as; overconfidence bias, herd behavior bias and risk tolerance bias. R square expresses the proportion of the variation in the dependent variable that is explained by variation in the independent variables. The range of coefficient of determination lies between 0 and 1. Since R square value is 0.289, it reflects that 29% of the variation in the extent of investment is explained by overconfidence bias, herd behavior bias and risk tolerance bias.
Furthermore, the F value is significant which is less than 0.05 [(F= (3,381) = 51.529] reflects that the model is reliable as dependent variable, i.e; extent of investment in capital market is significantly impacted by independent variables, i.e; overconfidence bias, herd behavior bias and risk tolerance
From the Table 4.7, it is observed that there is a moderate positive correlation among overconfidence, herd behavior, risk tolerance and the extent of investment in the capital market using the pearson correlation. The correlation between overconfidence …show more content…
It was used to test if the extent of investment in the capital market is predicted by overconfidence bias, herd behavior bias and risk tolerance bias. Here, R represents the multiple correlation coefficients that measure the strength and direction of a relationship between the variables. It ranges from -1 to +1. R value reflects the score of .537, which states that the total extent of investment in capital market has a positive relationship with independent variables such as; overconfidence bias, herd behavior bias and risk tolerance bias. R square expresses the proportion of the variation in the dependent variable that is explained by variation in the independent variables. The range of coefficient of determination lies between 0 and 1. Since R square value is 0.289, it reflects that 29% of the variation in the extent of investment is explained by overconfidence bias, herd behavior bias and risk tolerance bias.
Furthermore, the F value is significant which is less than 0.05 [(F= (3,381) = 51.529] reflects that the model is reliable as dependent variable, i.e; extent of investment in capital market is significantly impacted by independent variables, i.e; overconfidence bias, herd behavior bias and risk tolerance