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Korean Journal of Financial Studies 2011;40(1):57-84.
Published online February 28, 2011.
Investor Perception and Behaviors in the Korean ELW Market
Bong Chan Kho
ELW 시장의 투자자 인식과 투자행태 분석
Since its inception in 2005, the Korean ELW (Equity-Linked Warrants) market has grown to become the second largest in the world after Hong Kong. This paper conducts a comprehensive survey regarding the investor perception and behaviors in the Korean ELW market, and draws suggestions for the sound growth of the Korean ELW market. About half of the respondents (46%) to this survey have experiences in ELW investments, which implies that ELWs have become a common investment vehicle for Korean individual investors since its inception in 2005. Moreover, a whopping 81% of the respondents demonstrate an intention to invest in ELWs in the future, because they expect a high rate of return with a small amount of investment capital in a short period of time. In contrast, the other 19% fear the most the possibility to lose their capital for the same short period of time. In order to identify the factors affecting the intention to invest in ELWs in the future, a probit regression model is estimated. The result indicates that investors are more willing to invest in ELWs as they are more experienced with better knowledge on ELWs and are more favorable to the ELW issuers. In sum, it is clear that the detailed suggestions for the sound growth of the Korean ELW market should be directed to further educate investors about ELWs, restore investors` confidence in ELW issuers, and improve the market surveillance of financial authorities.
Key Words: 조기종료 ELW,투자자 인식,투자행태,프로빗 회귀분석,Behavior,ELW,Investor Perception,KOBA ELW,Probit Regression

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