Effect of Behavioural Biases on Investments at the Rwanda Stock Exchange

Jacob Niyoyita Mahina; Willy Muturi; Memba Florence

doi:doi:10.11648/j.ijafrm.20170204.11

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Effect of Behavioural Biases on Investments at the Rwanda Stock Exchange

Jacob Niyoyita Mahina, Willy Muturi, Memba Florence

Published in International Journal of Accounting, Finance and Risk Management (Volume 2, Issue 4)

Received: 27 May 2017 Accepted: 5 July 2017 Published: 9 August 2017

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Abstract

The main objective of this study was to establish the effect of behavioural biases on investment in the Rwanda Stock Exchange. The specific objectives were to establish the effects of self-serving bias, over-optimism bias, loss aversion, self- attribution bias and confirmatory bias on investment in the Rwanda stock exchange. The prospect theory, heuristics theory and herding theory formed the foundation of this study. The underlying epistemology of this research was positivist; focusing on examining earlier established theories under the assumption that reality is objectively given and can be described by measurable properties independent of the observer and the instruments. The study used cross-sectional descriptive survey research design to ascertain and establish the effect of behavioural biases on investment in the Rwanda stock exchange. The target population comprised of 13,543 individual, group investors at the Rwanda Stock Exchange. Random sampling was used where the targeted population was individual investors to finally yield a sample size of 374 respondents. A questionnaire was used to collect the primary data. Data analysis involved the use of descriptive and inferential statistics. A linear regression model was used to predict the probability of different possibility outcomes of dependent variables, helping to predict the probability of an investor to invest in Rwanda Stok Exchange. The results confirmed that there was a significant positive linear relationship between self-serving bias, over-optimism bias, loss aversion bias, self-attribution bias, confirmatory bias and Investment in Rwanda stock market. The study also concluded that most investors suffered from behavioural biases in investment in stock markets. The study further recommends that the individual investors to seek the advice of stock brokers/fund managers to advise them accordingly in terms of performance of a specific security in which an investor would wish to invest in.

Published in	International Journal of Accounting, Finance and Risk Management (Volume 2, Issue 4)
DOI	10.11648/j.ijafrm.20170204.11
Page(s)	131-137
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Self-Serving Bias, Over-Optimism Bias, Loss Aversion, Self-Attribution Bias, Confirmatory Bias, Investment, Rwanda Stock Exchange

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APA Style

Jacob Niyoyita Mahina, Willy Muturi, Memba Florence. (2017). Effect of Behavioural Biases on Investments at the Rwanda Stock Exchange. International Journal of Accounting, Finance and Risk Management, 2(4), 131-137. https://doi.org/10.11648/j.ijafrm.20170204.11

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ACS Style

Jacob Niyoyita Mahina; Willy Muturi; Memba Florence. Effect of Behavioural Biases on Investments at the Rwanda Stock Exchange. Int. J. Account. Finance Risk Manag. 2017, 2(4), 131-137. doi: 10.11648/j.ijafrm.20170204.11

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AMA Style

Jacob Niyoyita Mahina, Willy Muturi, Memba Florence. Effect of Behavioural Biases on Investments at the Rwanda Stock Exchange. Int J Account Finance Risk Manag. 2017;2(4):131-137. doi: 10.11648/j.ijafrm.20170204.11

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@article{10.11648/j.ijafrm.20170204.11,
  author = {Jacob Niyoyita Mahina and Willy Muturi and Memba Florence},
  title = {Effect of Behavioural Biases on Investments at the Rwanda Stock Exchange},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {2},
  number = {4},
  pages = {131-137},
  doi = {10.11648/j.ijafrm.20170204.11},
  url = {https://doi.org/10.11648/j.ijafrm.20170204.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20170204.11},
  abstract = {The main objective of this study was to establish the effect of behavioural biases on investment in the Rwanda Stock Exchange. The specific objectives were to establish the effects of self-serving bias, over-optimism bias, loss aversion, self- attribution bias and confirmatory bias on investment in the Rwanda stock exchange. The prospect theory, heuristics theory and herding theory formed the foundation of this study. The underlying epistemology of this research was positivist; focusing on examining earlier established theories under the assumption that reality is objectively given and can be described by measurable properties independent of the observer and the instruments. The study used cross-sectional descriptive survey research design to ascertain and establish the effect of behavioural biases on investment in the Rwanda stock exchange. The target population comprised of 13,543 individual, group investors at the Rwanda Stock Exchange. Random sampling was used where the targeted population was individual investors to finally yield a sample size of 374 respondents. A questionnaire was used to collect the primary data. Data analysis involved the use of descriptive and inferential statistics. A linear regression model was used to predict the probability of different possibility outcomes of dependent variables, helping to predict the probability of an investor to invest in Rwanda Stok Exchange. The results confirmed that there was a significant positive linear relationship between self-serving bias, over-optimism bias, loss aversion bias, self-attribution bias, confirmatory bias and Investment in Rwanda stock market. The study also concluded that most investors suffered from behavioural biases in investment in stock markets. The study further recommends that the individual investors to seek the advice of stock brokers/fund managers to advise them accordingly in terms of performance of a specific security in which an investor would wish to invest in.},
 year = {2017}
}

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TY  - JOUR
T1  - Effect of Behavioural Biases on Investments at the Rwanda Stock Exchange
AU  - Jacob Niyoyita Mahina
AU  - Willy Muturi
AU  - Memba Florence
Y1  - 2017/08/09
PY  - 2017
N1  - https://doi.org/10.11648/j.ijafrm.20170204.11
DO  - 10.11648/j.ijafrm.20170204.11
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 131
EP  - 137
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20170204.11
AB  - The main objective of this study was to establish the effect of behavioural biases on investment in the Rwanda Stock Exchange. The specific objectives were to establish the effects of self-serving bias, over-optimism bias, loss aversion, self- attribution bias and confirmatory bias on investment in the Rwanda stock exchange. The prospect theory, heuristics theory and herding theory formed the foundation of this study. The underlying epistemology of this research was positivist; focusing on examining earlier established theories under the assumption that reality is objectively given and can be described by measurable properties independent of the observer and the instruments. The study used cross-sectional descriptive survey research design to ascertain and establish the effect of behavioural biases on investment in the Rwanda stock exchange. The target population comprised of 13,543 individual, group investors at the Rwanda Stock Exchange. Random sampling was used where the targeted population was individual investors to finally yield a sample size of 374 respondents. A questionnaire was used to collect the primary data. Data analysis involved the use of descriptive and inferential statistics. A linear regression model was used to predict the probability of different possibility outcomes of dependent variables, helping to predict the probability of an investor to invest in Rwanda Stok Exchange. The results confirmed that there was a significant positive linear relationship between self-serving bias, over-optimism bias, loss aversion bias, self-attribution bias, confirmatory bias and Investment in Rwanda stock market. The study also concluded that most investors suffered from behavioural biases in investment in stock markets. The study further recommends that the individual investors to seek the advice of stock brokers/fund managers to advise them accordingly in terms of performance of a specific security in which an investor would wish to invest in.
VL  - 2
IS  - 4
ER  -

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Author Information

Jacob Niyoyita Mahina

Faculty of Business Studies, University of Tourism, Technology and Business Studies, Kigali, Rwanda
Willy Muturi

Facultyof School of Business, Department of Economics, Accounting and Finance, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya
Memba Florence

Facultyof School of Business, Department of Economics, Accounting and Finance, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya

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Jacob Niyoyita Mahina, Willy Muturi, Memba Florence. (2017). Effect of Behavioural Biases on Investments at the Rwanda Stock Exchange. International Journal of Accounting, Finance and Risk Management, 2(4), 131-137. https://doi.org/10.11648/j.ijafrm.20170204.11

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ACS Style

Jacob Niyoyita Mahina; Willy Muturi; Memba Florence. Effect of Behavioural Biases on Investments at the Rwanda Stock Exchange. Int. J. Account. Finance Risk Manag. 2017, 2(4), 131-137. doi: 10.11648/j.ijafrm.20170204.11

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AMA Style

Jacob Niyoyita Mahina, Willy Muturi, Memba Florence. Effect of Behavioural Biases on Investments at the Rwanda Stock Exchange. Int J Account Finance Risk Manag. 2017;2(4):131-137. doi: 10.11648/j.ijafrm.20170204.11

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@article{10.11648/j.ijafrm.20170204.11,
  author = {Jacob Niyoyita Mahina and Willy Muturi and Memba Florence},
  title = {Effect of Behavioural Biases on Investments at the Rwanda Stock Exchange},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {2},
  number = {4},
  pages = {131-137},
  doi = {10.11648/j.ijafrm.20170204.11},
  url = {https://doi.org/10.11648/j.ijafrm.20170204.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20170204.11},
  abstract = {The main objective of this study was to establish the effect of behavioural biases on investment in the Rwanda Stock Exchange. The specific objectives were to establish the effects of self-serving bias, over-optimism bias, loss aversion, self- attribution bias and confirmatory bias on investment in the Rwanda stock exchange. The prospect theory, heuristics theory and herding theory formed the foundation of this study. The underlying epistemology of this research was positivist; focusing on examining earlier established theories under the assumption that reality is objectively given and can be described by measurable properties independent of the observer and the instruments. The study used cross-sectional descriptive survey research design to ascertain and establish the effect of behavioural biases on investment in the Rwanda stock exchange. The target population comprised of 13,543 individual, group investors at the Rwanda Stock Exchange. Random sampling was used where the targeted population was individual investors to finally yield a sample size of 374 respondents. A questionnaire was used to collect the primary data. Data analysis involved the use of descriptive and inferential statistics. A linear regression model was used to predict the probability of different possibility outcomes of dependent variables, helping to predict the probability of an investor to invest in Rwanda Stok Exchange. The results confirmed that there was a significant positive linear relationship between self-serving bias, over-optimism bias, loss aversion bias, self-attribution bias, confirmatory bias and Investment in Rwanda stock market. The study also concluded that most investors suffered from behavioural biases in investment in stock markets. The study further recommends that the individual investors to seek the advice of stock brokers/fund managers to advise them accordingly in terms of performance of a specific security in which an investor would wish to invest in.},
 year = {2017}
}

Copy | Download

TY  - JOUR
T1  - Effect of Behavioural Biases on Investments at the Rwanda Stock Exchange
AU  - Jacob Niyoyita Mahina
AU  - Willy Muturi
AU  - Memba Florence
Y1  - 2017/08/09
PY  - 2017
N1  - https://doi.org/10.11648/j.ijafrm.20170204.11
DO  - 10.11648/j.ijafrm.20170204.11
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 131
EP  - 137
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20170204.11
AB  - The main objective of this study was to establish the effect of behavioural biases on investment in the Rwanda Stock Exchange. The specific objectives were to establish the effects of self-serving bias, over-optimism bias, loss aversion, self- attribution bias and confirmatory bias on investment in the Rwanda stock exchange. The prospect theory, heuristics theory and herding theory formed the foundation of this study. The underlying epistemology of this research was positivist; focusing on examining earlier established theories under the assumption that reality is objectively given and can be described by measurable properties independent of the observer and the instruments. The study used cross-sectional descriptive survey research design to ascertain and establish the effect of behavioural biases on investment in the Rwanda stock exchange. The target population comprised of 13,543 individual, group investors at the Rwanda Stock Exchange. Random sampling was used where the targeted population was individual investors to finally yield a sample size of 374 respondents. A questionnaire was used to collect the primary data. Data analysis involved the use of descriptive and inferential statistics. A linear regression model was used to predict the probability of different possibility outcomes of dependent variables, helping to predict the probability of an investor to invest in Rwanda Stok Exchange. The results confirmed that there was a significant positive linear relationship between self-serving bias, over-optimism bias, loss aversion bias, self-attribution bias, confirmatory bias and Investment in Rwanda stock market. The study also concluded that most investors suffered from behavioural biases in investment in stock markets. The study further recommends that the individual investors to seek the advice of stock brokers/fund managers to advise them accordingly in terms of performance of a specific security in which an investor would wish to invest in.
VL  - 2
IS  - 4
ER  -

Copy | Download