The Assets Selection Behavior Of Investor: From The Perspective Of Investor Protection

In recent years Investor protection attracts more and more attention in every stock market all over the world. There are many academic papers about investor protection. This paper reviews a lot of paper about theory of investor protection at first, and shows the relation between investor protection and capital market as well as economic growth. Secondly, my paper primarily analysis the effect that how investor protection will impact the behavior of investment such as investor modifies optimal proportion of risk assets. Thepaper constructs a new model which combines models of Albuquerque,Wang (2004)and Merton(1990) analysis the assets selection behavior of investor. Through analysis, We know investor protection will affects the return rate of stock, the volatility of return and interest rate , whereas he return rate of stock, the volatility of return and interest rate will affects optimal proportion of risk assets hold by investor. Hence, investor protection imposes effect on the behavior of investment by there three characteristics of asset. This paper has not presented the quantitative effect that investor protection affects the investor's behavior of investment. It is shortage of this paper .My paper complements the theory of investor protection; I think my paper could explain the investor selects more riskless assets such as bond and deposit but selects less risky assets such as stock in our country.This paper indicates the significance of investor protection in the view of relation between investor protection and assets selection of investor. If investor protection is poor in stock market, the minority's benefit will often be expropriated by insider. Then, the investor will lose confidence of stock markets, and they will never invest their money into stock market.