n NISM Certifications
XV NISM Series XV
Medium

Investors prefer businesses with low entry barriers. True or False?

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    True

  2. False

    Correct answer

Why this is the answer

Investors favor businesses with high entry barriers because they limit competition, protect pricing power, and enhance profitability. Low barriers increase competitive pressure and reduce returns.

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