Multiple choice

Directions: Select the option that best answers the question at the end of the paragraph.

Seasoned market observers have often commented that a study of human nature is far more useful for investors than number crunching skills. And as expert chroniclers of human behaviour are wont to put it. “History always repeats itself“. There is no better example of this truism than the behaviour of investors. The last three years battered investor confidence to levels where they refused to buy anything at any price. And now, when life looks a little rosier, they are once again falling for the same old gimmicks in new disguises. The story of 1997 has undoubtedly been that of the software industry, and today, even second and third line stocks are shooting up. The author is

  1. cautioning against the futuristic mindset of investors

  2. assessing the various bottlenecks of the software industry

  3. talking about the inherent danger of the stock market

  4. justifying the continuing craze of software stocks
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The author has talked about study of human nature and trying to judge the trend in which the investors would behave in future. So, (1) is the only relevant option. (2) & (4) choices have specifically mentioned about 'software' but 'software' is simply a reference taken by the author and so, 'software doesn't come into picture in the central idea. (3) can't be the answer as 'inherent danger' of stock market does not come in the central idea.

Keep practicing — related questions