What form of irrational behavior can cause asset price bubbles?
A) People do not based their investment decision on the fundamental value of the asset but only on the belief that the asset price will continue to increase.
B) People accidentally buy assets that they did not want, and this drives up the asset price.
C) Asset owners panic and begin to sell their assets as quickly as possible.
D) People throw darts at a list of stocks and buy whatever the dart lands on without thinking about the reasons.

Question

Quizplus · Accepted Answer

Asset price bubbles occur when people invest solely based on the belief that the asset price will continue to increase, even if the fundamentals do not support it. This behavior is irrational because it ignores the actual value of the asset and can lead to prices becoming disconnected from reality.

What Form of Irrational Behavior Can Cause Asset Price Bubbles