The "greater fool" theory assumes that

Question

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The "greater fool" theory assumes that it is not foolish to buy an asset at a high price as long as there is someone else (a greater fool) who will buy it later for an even higher price. This assumes that markets may not always be efficient and can be influenced by investor psychology, creating bubbles where assets are overvalued based on speculative demand rather than fundamentals. The theory does not make any assumptions about bond market returns or the existence of bubbles in well-organized markets.

The "Greater Fool" Theory Assumes That