Which characteristic is crucial for a company to generate Multibagger Stocks? Option: Low earnings per share and high debt-to-equity ratio, Monopoly in the market with high entry barriers, Poor management skills and lack of coordination, Limited investment in research and development

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Which characteristic is crucial for a company to generate Multibagger Stocks?

Low earnings per share and high debt-to-equity ratio

Monopoly in the market with high entry barriers

Poor management skills and lack of coordination

Limited investment in research and development

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What are Multibagger Stocks?

Stocks with guaranteed high returns

Stocks that generate returns multiple times higher than their acquisition cost

Stocks that always reflect an economic bubble

Stocks of companies with low growth potential

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Why are Multibagger Stocks considered a high-risk investment?

Potential for substantial losses in a market downturn

They are only issued by well-established companies

They guarantee high returns with no risk

They are not influenced by economic bubbles or value traps

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How do Large-cap funds minimize investment risk compared to Multibagger Stocks?

By investing in established companies with large market capitalization and proven financial stability

By primarily investing in debt securities with low risk and low returns

By focusing on companies with unproven financial strength and limited resources

By investing in companies with small market capitalization and high growth potential

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What characteristic of small-cap stocks makes them potentially suitable for investors seeking high returns?

Fixed dividends

Low volatility

Government backing

Potential for high growth

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What is a key drawback of investing in large-cap stocks?

Low Dividend Payouts

Lack of Liquidity

Limited Growth Potential

High Volatility