Standard finance is based on the notion of Homo Economicus or 'rational economic man'.

Stemming from neo classical economics, Homo economicus is a simple model of Human economics behaviour which assume that the prnciples of perfect self interest , perfect rationality, ad perfect information govern economic decisions by individuals. (meenu arma, !""#$. %eir Statman (!""#$, included that Stadnard finance is also &nown as modern finance portfolio theroy which as bloc&s li&e 'nvestors are rational, mar&ets are always efficient, investor design their portfolios and investors are wealth ma(imi)ers (*lbert +hung, !",-$. Standard finance is the body of &nowledge build on the pillars of the arbitrage principles of %iller and %odigliani, the .apital *ssept +ricing theory of Sharpe, /inter 0 1lac&, and the option 2 pricing theory of blac& Scholes and %erton %er rStatman , ,333$ and Efficient %ar&et Hypothesis (E%H$ theory. 4he E%H is the corner stone of rationality that purportedly governs the functioning of well developed financai lmar&ets. 5nder semi strong form of the E%H, mar&et prices are considered to reflect all the past and current infroamtion regarding assets price6 thus, future changes in assets prices are said to follow 'random wal&'. (Singh Sudhir , !",!$. *s per 7r Swapan 8oy (!",,$, +eople always always rational and process data correctly , view all decision through ris& and return ob9ectives. He also assumed that people are guided by reason, logic and individual 9usdgement 1ut %ost of time people neither perfectly rational nor perfectly irrational6 they possess diverse combinations of rational or irrational characteristics. (meenu arma, !""#$. 'n finance rationality has two things : *gents beliefs are correct and second, given theri beliefs, agents ma&e choices that are normatively acceptable. (Singh 8an9it, !""3$. 4hrere are many instance where emotions and psychology influence our decision , causing us to behave in unpredictable or irrational ways. (albert +hung, !",-$. *ltough people driven by emotional and psychological factors in ma&ing decision, mar&ets have seller for every buyer.(Singh Sudhir, !",!$. *s per 7r Swapan ;umar 8oy (!",,$, people employ imperfect rule of thumb to process data influenced by theri biases and beliefs which end in errors. He added that emotions and herd instincts play an important role in infulecing deicsions. 1ut a field of research is coming up which emphasis that psychological element in financial decision ma&ing . <hich add that brain has similar tools for processing financial data and producing estimates when ma&ing investment decisions. 4his field of research is simetime refered to as behavioural economics = behavioural finance which comobines two disciplines of psychology and economics to e(plain why and how people ma&e financial decisions. (Singh 8an9it , !""3$. behavioural >inance , which stem from 1ehavioural economics, is trying to identify particular human error that are charcterisitcs of financial mar&et places. Economics covers psychology to define irrational behaviour. 't focus on herd instincts, irrational ears and poor self control. 1ehavioural finance a new and evolving field in economics that is discussed a lot. 't focused on the psychological factors that lead to common investement practices. (?udy > @raham, $. 't e(plain that individauls do no always act rationaly in theri financial decisions and ma&e different choices. (Swapan Sar&ar , !",,$.

/alit %ohan ;athuria and ;ani&a Singhania ( $, paper titled 'nvestment 7ecision %a&ing : * gender based study of +rivate Sectro 1an& employees, pubslied in '5+ ?ournal of behavioural >inance >inding revealed that both male and female respondents were using maga )ines, internet and 4 channels as the three most important sources of awareness regarding various investment aveneue, despite being ban& employees. *lso male and female respondents were investing a larger portion of their savings in safe and ris& free investement aveneus li&e emoplyees provident funds, public provident funds and life insurance policies. 't was surprising to &now that though they wer eban& employees they consider life insurance policy as investement tool, while life insurance shlud treated as an insurance cover rather than as investmeent. *nother important findings of the study is that even female respondents were not investing a large proportion of theri savings in gold. 4he article found that as the advice of paretns and spouse has been rated as the most important factor that influence theri investement decision by female respondents.

/ori / Embrey and ?onathan ? >o( ( 7ecision ma&ing process

$, paper titled @ender differences in the 'nvestment

4his study used a sample of one person households from the ,33A. Survey of consumer finances to e(plore gender difeerence in investment decison ma&ing process. 4he determinants of some investement choice. <omen were more li&ely to hold ris&y assets if e(pecting an inheritance, employed and holding higher net worth while men invested in ris&y assets if they were ris& see&ers, divorced , older and college educated. .ombination of low ris& investing, lower earnings, little savings and greater needs presented women and their financial advisors with a significant challenge. <hile e(pecting to live longer is a benefit of being a women it places greater demand on retirement plans. 4his study focuses specifically on women living alone and how their investement decision differe from than men living alone. 4his study also found that women invest in less ris&y assets than men. Hoever, in the sample of singles drawn from the ,33A survey on consumer finance, gender did not prove to be the critical determinant of investement choice. 'n fact, determinant of investement patterns in financial assets attributable of gender. * ris& averse women may choose an aggresive investment strategy if her partner's asset mi( is, in her view, to conservative to attain long term financial goals. Single women are &nown to have greater long term financial needs which must be met with investment.

?enna >ish ( 7eicsion

$, paper titled , 1ehavioural >inance :* study of gender affects on ivnesting

* study paper tal&ed about common beliefs regarding female investors that females are more ris& averse than males. 4his become problems for females in two situations : retirement funds and careers. >emales tends to outlive males and need more funds than males to support themselves throught retirement. 'n addition, not all females may be more ris& averse, but bro&er are assuming without Buestions that female would prefer to invest theriassets in less ris&y options. Second, since females are perceived to be less ris& prone than males, there is a glass ceiling on how they are able to climb the corporate ladder. >emales may not be promoted to the same levels as males because the position reBuires ris& ta&ing and it is believed that females will not be capable of handling such a position. 4here are many factors discussed in paper li&e financial &nowledge and wealth that may affect ris& ta&ing behaviour of individual. 4hough females control theri daily household finance, many of them them are not involved in investment of their assets. %any of the women are unaware or less &nowledgeable regarding investement. 'n general male tends to have more financial &nowledge and wealth which means they are more confident in theri investing decisioin, and more apts to toa&e ris&. *ccording to past research, as financial &nowledge and wealth increase, a person's ris& aversion decreases. >emales in the finance industry may ta&e greater ris&s because they have &nowledge of the industry and investing, so they are more confident and confortable wit ta&ing ris&s. 4his study showed that females invest in less ris&y assets. 4his is important because, females are treated differently in wor& places. E(cept gender threre are also ther factors that affect investement behaviour.

?ose * Clivares , %agdelena 1esser and 7aniela 7ia) ( $, paper titled @ender and +ortfolio choice : *re women moreris& averse when selecting pension fundsD Empirical evidence has been provided in evaluation gender difference in portfolio choice in private pension funds. <omen tends to invest in ris& averse than men when moving theri financial resources among types of funds. @ender differences in pension fund sportfolio choice are driven by age and level of wealth between men and women. <omen earn lower incomes, retire earlier and select lower ris&y portfolio than men, and women will receive a lower retirement paymentsin the future. >indings proved that men receive higher slaries and acumulate larger balance in their individual account than women. Eoung women invest in less ris&y assets due to, perhaps, young women assume maternity and child care during her wor&ing life. 8esults showed that men are more li&ely to change from lower ris&y portfolios to larger ris&y ones. 4herefore, it is possible that women will receive lower retirement cash flows than men in future, as women have longer life spans than men. 4hs study receommend to portfolio managers and policyma&ers that they should design better retirement plans for women. .onsdiering that women accumulate fewer amounts of funds in their accounts and live longer years than men, a financial solution must provided in short run by policy ma&ers.

<en 2 .hieh <u F ( $, paper titled @ender difference in financial investment behaviour of the 4aiwaneses Elderly, 4his research paper concluded that not only the gender of decision ma&ers matters, the off spring gender is also found to have effects on parental investment decision ma&ing. *nother important thing paper showed is financial &nowledge. 't is important in e(plaining the financial investement decisions. 'n fact, the financial &nowledge can be closely related to the educational bac&ground , occupational bac&ground and residential areas. %ore educated people are easier to learn financial &nowledge. %oreover wor&ing as white collars is more li&ely to e(pose to the financial sector. >urther more the financial information is relatively more available in the urban areas than rural areas. >inancial &nowledge is very difficiult to measure , but the education, occupation and residential area can be considered as the pro(ies of financial &nowledge. 4herfore, they should be also considered as important factos toe(plain the difference in portfolio allocation of wealth among the older population. 8esults showed female elderly are more li&ely to have both saving deposits and ris&y assets than male elderly. Having a higher probabilities of investing in ris&y assets is not consitent to he widespread view that women are relatively ris& averse than men. However, , this findings can be e(plained by the phenomenon that women are moreinto household financial decision than men. Education or urban residence has a positive effect on the li&elihood of owing saving deposits as well on the li&elihood of ris&y assets.

1hatt ;aushal * and 1hatt &in9al ( !",!$, in their article Effects of 'nvestor Cccupation and Education on .hoice of 'nvestement : *n Empirical Study in 'ndia, published in 'ntenational ?ournal of %anagement 7ecember !",!, pp G-3 HGA- showed that there is change in behaviour of investors towards investment prefernce with the change in occupation and as well as change in education level of investors. Study showed results that most of the investors prefer ban& deposit as it is tradational and safe avenue. <hile higher income and higher education classes, invest more in eBuity shares, mutual funds and insurance, >0 C, commodities and real estate.

%ahd)an , I . S. *nd 4abiani, S. (!",-$, in theri paper 4he 'mpact of >inancial /'teracy on 'ndividual Saving : * E(ploratory study in %alaysian .onte(t, published in 4ransformations in 1usiness J Economics, ol. ,!, 'ssue ,, pp G, 2 AA showed that financial literacy is an important determinants of individual saving. 4his study suggest that if the government aims to increase savings amongst households, it should increase efforts in promoting financial literacy through basic educational programs regarding fiancial issues. 't was also found that demographic factors li&e age and income also affect savings.

+owell %elanie and *nsic 7avid (,33J$, in theri paper @ender differences in ris& behaviours in financial 7ecisioni %a&ing : *n E(periemental *nalysis, published in ?ournal of Economic +sychology , ol ,#, pp K"A HK!# provided evidence fro mtwo new e(periments which e(amine the impact of familiarity, framing, cost and ambiguity as conte(t factors on ris& prefernce in fiancial decision ma&ing. 4he evidence suppotrs the view that gender difference in financial ris& prefernce e(ist in management populations. @ender differences in ris& propensity are also associated with a difference in decision strategy , which may arise from an underlying differences in motivation. 4hese differences could clearly affect cohices and opprtunities in the labour mar&ets , domestci decisions in financial planig and purchase and mar&eting of financial products.