• Dr Siby Joseph K
• Binny Treesa George

Abstract: Financial literacy is the ability to make well-informed financial decisions and encouraging financially responsible behavior. However, it is not the only significant determinant of sound financial decision making. On the one hand financial literacy leads to better financial decisions; on the other hand, behavioral biases cause irrational financial behavior. Cognitive biases are generally related to the way a person is bound to think. These biases are said to arise from statistical, information procession or memory errors that cause the decision to deviate from a rational decision. The study aims at determining the impact of financial literacy on selected four cognitive biases (overconfidence, herd instinct, regret aversion and representativeness) of individual investors. The main objective of this study was to investigate the relationship between the financial literacy level of investors and the level of cognitive biases that may result in irrational behavior in investment decision making. The paper concludes that at every level of investment decision making process, biases do occur and which influences the outcome of the decision, resulting in a deviation from the actual outcome.

Financial Literacy, Cognitive biases, Over Confidence, Heard Instinct, Regret Aversion.

"THE IMPACT OF FINANCIAL LITERACY ON COGNITIVE BIASES OF INDIVIDUAL INVESTORS", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.8, Issue 8, page no.c932-c937, August-2021, Available :http://www.jetir.org/papers/JETIR2108364.pdf

"THE IMPACT OF FINANCIAL LITERACY ON COGNITIVE BIASES OF INDIVIDUAL INVESTORS", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.8, Issue 8, page no. ppc932-c937, August-2021, Available at : http://www.jetir.org/papers/JETIR2108364.pdf