Studying the risk-taking of financial market investors and its relationship with financial literacy

Economic Annals-XXI: Volume 215, Issue (5-6), Pages: 10-15

Citation information
Kholikov, Kh. (2025). Studying the risk-taking of financial market investors and its relationship with financial literacy. Economic Annals-XXI, 215(5-6), 10-15. doi: https://doi.org/10.21003/ea.V215-02

Khamidulla Kholikov
PhD (Economics),
Department of Licensing and Permitting Procedures,
Central Bank of the Republic of Uzbekistan6 Islam Karimov Str., Tashkent, 100001, Uzbekistan;Department of Corporate Finance and Securities,
Tashkent State University of Economics49 Islom Karimov Str., Tashkent, 100066, Uzbekistankhamidulla_kholikov@cbu.uz
h.kholiqov@tsue.uz
ORCID ID: https://orcid.org/0009-0004-6425-4664

Studying the risk-taking of financial market investors and its relationship with financial literacy

Abstract. This study tried to investigate the association between financial literacy and investors’ risk-taking behavior in the capital market of Uzbekistan. This study was a descriptive-correlational one, and data collection was done through a standardized questionnaire from 450 active investors during 2024-2025. The results of this study indicated that the association between financial literacy and risk-taking is positive and significant. Multivariate regression analysis also confirmed financial literacy as the strongest predictor of the risk-taking behavior. Specifically, whereas investors with higher financial literacy were not risk-averse, they tended towards more profitable opportunities, having a deeper understanding of the market. Segment-level results show that the high-risk (aggressive) group reported the highest mean return (12.3%), whereas the sample-wide mean annual return was 9.4%. The results stress the importance of developing sophisticated financial education programs in order to enhance informed decision-making by active investors.

Keywords: Financial Literacy; Risk-Taking; Investor; Uzbekistan Capital Market; Portfolio; ROI; Profit

JEL Classifications: G11; G41; D14; D91

Acknowledgements and Funding: The author received no direct funding for this research.

Contribution: The author contributed personally to this work.

Data Availability Statement: The dataset is available from the author upon request.

DOI: https://doi.org/10.21003/ea.V215-02

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Received 23.03.2025
Received in revised form 21.04.2025
Accepted 25.04.2025
Available online 27.06.2025