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Advanced Financial Literacy of Malaysian Gen Y Investors and Its Consequences

Author

Listed:
  • Mohammad Tariqul Islam Khan
  • Siow-Hooi Tan
  • Gerald Goh Guan Gan

Abstract

This article presents the advanced financial literacy of Malaysian Gen Y investors and investigates whether literacy varies across demographics and ethnicity, and how financial literacy is related to investing decisions. In a survey-based study (N = 231) with the estimation of crosstab, ordered logistic regression and binary logistic regression, the results suggest that Gen Y investors display a medium level of financial literacy and that investors with certain demographic characteristics and ethnicity display a relatively higher level of financial literacy. Literacy items such as knowledge of stocks and bonds, functioning of the stock market, working of long-term bonds and mutual funds, and riskiness of bonds versus stocks are more closely related to investors’ trading, risky share investment, willingness of risk-taking, stock market participation and perceived portfolio returns. The results imply a clear scope to improve Gen Y investors’ financial literacy by concentrating on a certain socio-demographic groups and specific financial literacy items. JEL Classifications: D14, G11, I20

Suggested Citation

  • Mohammad Tariqul Islam Khan & Siow-Hooi Tan & Gerald Goh Guan Gan, 2019. "Advanced Financial Literacy of Malaysian Gen Y Investors and Its Consequences," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 13(1), pages 83-108, February.
    • Handle: RePEc:sae:mareco:v:13:y:2019:i:1:p:83-108
    DOI: 10.1177/0973801018800085
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    More about this item

    Keywords

    Generation Y investor; Financial literacy; Demography; Ethnicity; Investment; Malaysia;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • I20 - Health, Education, and Welfare - - Education - - - General

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