International journal of Contemporary Business Studies

International Journal of Contemporary Business Studies
Vol: 3, No: 6. June, 2012 ISSN 2156-7506
Available online at http://www.akpinsight.webs.com
DATA ANALYSIS AND INTERPRETATION
Hypothesis 1:- Ho = 60% investors are Rational.
* Table -1 Rationality of Investors
Question No. Rational Option Rational Investor in Irrational Investor Total
1 Option No. 2 71 59 130
10 Option No. 1 74 56 130
11 Option No. 1 21 109 130
Here in question-1, investors who supposed to be rational would like to select option 2 because compare
to option 1 option 2 is profitable. In analysis 71 investors select option 2nd it show that 55% investors are
rational and 59 investors select option 1st it means 45% investors are irrational.
In question-10, under the rationality assumption of expected utility theory investors have to choose option
1 because option 1 offered loss of Rs. 100 and option 2 loss of Rs. 140. 74 investors select option 1st it
show that 57% investors are rational and 56 investors select option 2nd it means 43% investors are
irrational.
In question no. 11 As per Rationality theory of behavior finance, intuition of investors is not playing any
role in deciding or taking decision. The investors who are Rational they select option 1, that contain “no
effect” of intuition and who are irrational investors they select option 2 & 3, these contain “little effect”
and “high effect”. 21 investors select option 1 means 16% investors are rational on the other hand 109
investors who select option 2 & 3 means 84% investors are irrational.
N=130, x=55, p^=55/130 = 0.4230, p=.60, q=.40, = 7%, confidence level =93%
P^ p 0.4230
0.60
Z cal =
pq / n 0.60 *0.40 /130
=
= -0.1769/0.0429 = -4.12
Z cal