Risk appetite analysis by investor types: An application on BIST

The concept of risk, which has existed in human life for many years, has gained a different character with changing conditions over time. Especially with the intensification of commercial relations and the emergence of the market concept, the changing perception of risk perception led to the creation of many different works. The rational human understanding that has found its place in the literature for many years has been transformed with the understanding that deals with human psychological characteristics. Behavioral economics, which deals with human with its unique characteristics, has helped to reshape the phenomenon of risk by introducing a different human model to classical economics. In today's emerging markets, investors' attitudes towards risk affect the financial markets and cause a global fluctuation. At this point, studies on risk appetite, which is defined as the willingness of people to risk, gain great importance, but there are not many studies in this field. In most of the studies, risk appetite is handled with different dynamics. In this study, the effect of investors willingness to risk on investments in stocks is examined. In this study, the effect of the risk appetite indices of domestic and foreign investors on weekly BIST30 index data obtained between 2013 and 2017 was examined by ARDL limit test method. In addition, short and long term relationship between index data was examined and Granger Causality Test was applied to determine the direction of the relationship. The aim of the thesis is to determine to what extent and in what direction the investors' wishes for risk affect the investments made in BIST30 stocks. As a result of the thesis; While no significant result can be reached between the risk appetites of domestic and foreign investors with investments in BIST30 stocks in the long run, a significant relationship has been determined between the risk appetites of foreign investors and BIST30 stocks in the short term.