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The Bubble That Results from an Informational Cascade Can in Fact

Question 93

Multiple Choice

The bubble that results from an informational cascade can in fact be rational since:


A) investors know that the bubble will yield a negative return.
B) investors early in the chain may have obtained information that increases the expected gain to an investor down the chain.
C) the risk is small, and only a few investors will underestimate that risk.
D) all of the above

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