Which type of expectations can lead to an asset price bubble?
A)Extrapolative
B)Efficient
C)Real
D)Inverted

Name: Which type of expectations can lead to an asset price bubble? A)Extrapolative B)Efficient C)Real D)Inverted
Brand: Quizplus
Rating: 4.8 (39 reviews)

Question

Quizplus · Accepted Answer

Extrapolative expectations, where investors expect the large gains of the past to continue into the future, can lead to an asset price bubble as more and more investors buy into the asset, driving its price above its intrinsic value.

Which Type of Expectations Can Lead to an Asset Price