Abstract:

Why is it that your colleague at work, who is the same age as you, has a similar background in terms of educational qualifications, occupation and income - and who falls into roughly the same demographic category as you do - has a personal net worth that is far in excess of yours? It could be because of the fact that he has invested well, you may say. So, what is it then that motivates him to invest the way he does -and you the way you do? The hypothesis of this paper is that just as attitude shapes purchase behaviour for a consumer product, an investor's attitude to risk is a key motivating factor when it comes to investment or purchase decisions. This factor needs to be studied in depth by marketers of financial products in order to effectively segment the market and determine the niches that are most favourably disposed to their product. This paper seeks to determine the most appropriate model for the evaluation of risk attitude.