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ISSN 2063-5346
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Are the investors biased? An Empirical Study of Financial Market

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Dr Ratchana Rajendran, Dr. P. Ravisankar, Dr. Sneha Badola, Dr.Monica Chauhan Bhadoriya, Dr Veenus Gehlot, Dr. Madhu Bala Kaushik
» doi: 10.48047/ecb/2023.12.si10.00548

Abstract

The stock market is a crucial aspect of India’s financial market and the world's economy, which results in massive investment performances. In the fast-moving financial scenario, traditional finance is incapable of explaining the irrationality of an investor. The investors are irrational and are influenced by irregularities in the financial market. The current research focuses on the effect of behavioural biases on the investment decision-making process among individual investors in India. This article is driven by conducting a survey on 540 individual investors of India who participate in one or the other form in the Indian stock market. An empirical study by nature, the analysis of the study supports evidence establishing the adverse nature of behavioural biases affecting investment analysis and further their decision-making. The research implies a statistically significant association between behavioural biases and investment-related decisions. The results revealed a substantial impact of the behavioural biases affecting the investment decisions of the individual investors, namely, Loss aversion bias, Status quo bias, and Optimism bias. The results also exhibited that Loss Aversion bias had the maximum impact on the investment decision-making of an Indian individual investor

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