Financial Literacy And Investment Choices: Mediating Roles Of Risk Tolerance And Rational Decision-Making

Abstract

This study examines the crucial relationship between financial literacy and investment choices, focusing on the mediating roles of risk tolerance and rational decision-making. Despite extensive research on financial literacy's impact on investment behavior, a significant gap remains in understanding these mediators' influence. By surveying 150 individuals from diverse demographics, the research reveals that financial literacy significantly affects investment choices, with risk tolerance and rational decision-making serving as critical mediators. These findings provide valuable insights for financial educators and policymakers, emphasizing the need for tailored financial literacy programs that address individual differences in risk tolerance and decision-making abilities.