Financial risk tolerance revisited

the development of a risk assessment instrument

Authors

  • John Grable Kansas State University, 318 Justin Hall, Manhattan, KS 66506, USA
  • Ruth H. Lytton Virginia Tech, 101 Wallace Hall, Blacksburg, VA 24061, USA

DOI:

https://doi.org/10.1016/S1057-0810(99)00041-4

Keywords:

Heuristics, Risk Assessment, Risk Tolerance

Abstract

This paper explores conceptual, methodological, and empirical issues related to the development of a financial risk-tolerance assessment instrument. Financial risk tolerance is a significant factor in a number of household financial decisions, yet few recognized, valid, and reliable methods of assessment are available for use by financial service providers and educators. Empirical results from a multistage development of a 13-item risk assessment instrument are discussed. The multidimensional instrument is presented as the foundation for the development of a more widely used and accepted index. Future use by practitioners and researchers is encouraged to further validate the usefulness of the instrument. © 2000 Elsevier Science Inc. All rights reserved.

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Published

1999-09-30

How to Cite

Grable, J., & Lytton, R. H. (1999). Financial risk tolerance revisited: the development of a risk assessment instrument. Financial Services Review: The Journal of Individual Financial Management, 8(3), 163–181. https://doi.org/10.1016/S1057-0810(99)00041-4

Issue

Vol. 8 No. 3 (1999): Financial Services Review

Section

New Original Submission

License

Copyright (c) 1999 JAI Press Inc.

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