Frontiers Journal of Accounting and Business Research (FJABR)

The Relationship Between Financial Literacy And Risk Profile Among Youth

Keywords : Advanced Financial Literacy, Basic Financial Literacy, Finance, Financial Literacy, Risk Profile

Abstract

The purposes of the study are: to determine the level of financial literacy among youth and to examine the correlation of the financial literacy to risk a profile. In this study, a survey instrument which included 34 items that measures independent variables of financial literacy, using multiple choice questions and scores calculated by the percentage of the correct answers. The dependent variable measured using risk profile questions. A sample consisting of 535 college students participated in the study. The data analysis technique is used: 1). Percentage of the correct answers to determine the level of basic and advance financial literacy; 2). Identify investment preference to find out the respondent risk profile; 3). Spearman analysis to testing the correlation of financial literacy and risk profile. The mean correct answer is 56.6% and its level remains low. Respondents who can achieve the high score of the basic financial knowledge and advanced financial knowledge only 8.6%. Bank Account is the most popular preference investment product for college students, which is held by 88.8% of the respondents as conservative risk profiles. Spearman correlation test is used to analyze the data. The results showed that financial literacy and risk profile is a significant correlation.

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