Financial Knowledge and Rationality of Canadian Investors

55 Pages Posted: 13 Apr 2012

See all articles by Cécile Carpentier

Cécile Carpentier

Laval University; Center for Interuniversity Research and Analysis on Organization (CIRANO); University of Lille II - European Center for Corporate Control Studies

Jean-Marc Suret

Laval University; Center for Interuniversity Research and Analysis on Organization (CIRANO); European Center for Corporate Control Studies

Date Written: March 18, 2012

Abstract

Investors’ financial skill rests on two elements: 1) literacy, which is the financial knowledge itself and the skill required to use the knowledge, and 2) rationality, which refers to the lack of major biases such as overconfidence. To estimate the level of investors’ knowledge and rationality, we administered an online survey to 1814 investors in Québec and Ontario who manage their own stock portfolios. Their average portfolio is valued at $200,000, mostly invested in stocks of large or small listed companies. We measured knowledge using scores and compared these scores with investors’ evaluations of their knowledge in various areas, to examine the dimension of rationality. We also tried to identify several other behavioral biases.

Suggested Citation

Carpentier, Cécile and Suret, Jean-Marc, Financial Knowledge and Rationality of Canadian Investors (March 18, 2012). Available at SSRN: https://ssrn.com/abstract=2038930 or http://dx.doi.org/10.2139/ssrn.2038930

Cécile Carpentier

Laval University ( email )

Pavilion Palasis Prince
Quebec, Quebec G1V 0A6
Canada

Center for Interuniversity Research and Analysis on Organization (CIRANO) ( email )

2020 rue University, 25th floor
Montreal, Quebec H3C 3J7
Canada

University of Lille II - European Center for Corporate Control Studies ( email )

2 rue de Mulhouse
BP381
Lille, 59800
France

Jean-Marc Suret (Contact Author)

Laval University ( email )

Accounting School
Quebec, P.Q. G1K 7P4
Canada
418-656-7134 (Phone)
418-656-7746 (Fax)

Center for Interuniversity Research and Analysis on Organization (CIRANO) ( email )

1130 rue Sherbrooke Ouest
Bureau 1400
Montreal, Quebec H3A 2M8
Canada

European Center for Corporate Control Studies ( email )

2 rue de Mulhouse
BP381
Lille, 59800
France

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