When asset prices increase above their fundamental values it is called an
A)asset-price bubble.
B)irrational bubble.
C)asset-price spike.
D)irrational spike.

Question

Quizplus · Accepted Answer

When asset prices increase above their fundamental values, it is considered an asset-price bubble. This happens because there is an excessive financial speculation, leading to the prices being driven up beyond their real worth. Eventually, the bubble bursts when the market realizes that the prices are not sustainable.

When Asset Prices Increase Above Their Fundamental Values It Is