Muhannad AlOtaibi

Artificial Intelligence Specialization · Cohort 2025

How Well Do Households Understand Stock Market Returns?

Why don’t more households invest in the stock market? Is it too difficult to open a brokerage account? While this may have been true in the past, advancements in FinTech have made the process simple and accessible, often requiring just a few taps on a smartphone. Instead, could the real issue be that households are simply misinformed about the risks and returns of stock market investing? Using large-scale survey data, this project aims to explore whether limited stock market participation can be attributed to misperceptions about expected returns. We will study patterns of misperceptions across household types along observable characteristics like income, age, and occupation. We also seek to study which interventions can alleviate misinformation and help increase stock market participation. This project will entail collecting, analyzing, and visualizing data. Strong and pragmatic programming experience are required to download and assemble large data sets. An understanding of financial conepts is required for analysis, and visualization entails displaying in a concise yet appealing way. This project is ideal for an undergraduate student with some research experience and who is considering graduate school in economics or finance.

Mentor: Michael Boutros