Financial Literacy and Decision-Making: Appli...

Financial Literacy and Decision-Making: Applications of the Hypergeometric Distribution in Financial Modelling

Author Name : Shourya Shrivastava, Ranjana Shrivastava

ABSTRACT Financial literacy has become essential for informed decision-making in today’s economy. This paper explores how mathematical modelling, specifically the hypergeometric distribution, can improve financial literacy by providing insights into the probability of certain financial outcomes. By modelling investment decisions as finite probabilistic events, we can illustrate the impact of different levels of risk tolerance and asset selection in achieving optimal financial outcomes. The hypergeometric distribution, therefore, becomes a valuable tool for financially literate individuals aiming to make data-driven investment choices.This research provides a model to assess financial literacy's probabilistic impact on investment preferences in India, offering insights for demographic-specific financial literacy initiatives.