THE FACE AND CONTENT VALIDITY OF AN INSTRUMENT FOR MEASURING FINANCIAL RISK TOLERANCE

Accurate evaluation of investment risk tolerance is critical in an decision-making process because a mismatch between the investor could tolerate and risk-return expectations lead to frustration towards actual financial gains or losses. This study aims develop valid instrument (or scale) for self-directed Malaysian investors measure based on four main constructs, i.e., attitude, propensity, capacity, literacy. An initial 36-item was developed assessment framework from Cordell (2001), which subsequently examined by lay experts face validity. Consequently, according Andrian et al. (2018), seven professional experts, comprising theoretical, industry practitioner, psychometric were involved reviewing relevancy content each item measuring level. As result, deemed have good value, with 94.4% items rated highly at 4 3 (out maximum rating 4) experts. Out 36 items, only 5.56% are 1 2, 16.7% require revision terms their value clarity. The validity exercise resulted high scores more than 0.83 cut Lynn (1986) scale index (S-CVI), nine recorded as (I-CVI) below 0.83. S-CVI improved further 0.90 after removal low I-CVI. findings also successfully produced that can level Malaysia.