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Abstract
Financial Literacy is an important element for saving and investment decision. Risk tolerance plays a
vital role in an individual’s choice of investment unit. The main objective of this research is to examine
the relationship between financial literacy, risk tolerance, saving and investment decision as well to
assess the difference in the saving, investment in insurance, investment in mutual fund, investment in bond
and investment in stock with regard to the knowledge of financial literacy, level of financial risk tolerance
also to examine the effect of financial literacy and financial risk tolerance on saving and investment
decision. The study collected primary data by using five point Likert scale questionnaire technique from
299 respondents who are the bank customer of Tilottama municipality. Study based on descriptive and
causal comparative research design. This research used quantitative mode for data gathering for the
purpose of study. Mainly structured questionnaires survey was used to generate responses based on
which analysis is done to test hypothesis. The sampling technique for the study followed saving and
investment as dependent variable whereas financial literacy and risk tolerance as independent variable.
The correlation and regression analysis result was generated from SPSS software available in the library
of Lumbini Banijya Campus. Result of the study have revealed that there is a significant relationship
between financial literacy and risk tolerance in saving and investment decision. Likewise, it is found there
is association between saving, investment in bond, investment in mutual fund and investment in stock with
regard to the level of financial literacy and risk tolerance.
Key words: Financial Literacy, Risks Tolerance, Saving and Investment.