Question

Which of the following is not a constraint faced by an individual investor while investing in capital markets or other asset classes?

• A. Ignorance about capital markets and other assets
• B. Risk diversifcation
• C. Lack of avenues for investment
• D. Professional know-how of the behavior of share markets

Answer 1

The correct option is C Lack of avenues for investment

While there are multiple avenues available where investors can park their money, lack of knowledge about capital markets restraints them from making the right decisions. This is where mutual funds come into picture. The fund managers are professionally enabled to make decisions on behalf of the investors. Since they collect a large pool of money, which can be invested in multiple asset classes and securities,the risk is sufficiently diversified.