Multiple choice

Direct investment in stock market can be a better option than investing through mutual funds if the investor

  1. Wants better returns than those offered by mutual funds

  2. Has large capital, knowledge and resources for research

  3. Has identified a bullish phase in the stock market

  4. Wants to invest for the long term
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Direct stock market investing can be superior if the investor has substantial capital to achieve proper diversification, deep knowledge of stock analysis, and resources for continuous research. Option A is not a valid reason - wanting better returns does not justify direct investment. Option C (identifying bullish phases) is market timing, which is unreliable. Option D (long-term investing) applies equally to mutual funds. Option B correctly identifies the prerequisites for successful direct investing: capital, knowledge, and research capability.

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