Which one of the following statements is true?
A) Market crashes tend to be accompanied by low market volume.
B) The Asian market crash was followed by a quick recovery.
C) The market crashes of 1929 and 1987 are very similar in both the percentage decline in market value and in the ensuing market recovery.
D) Market crashes tend to follow market bubbles.
E) Market bubbles and crashes prove that financial markets are inefficient.

Question

Quizplus · Accepted Answer

Market crashes often occur after a period of economic expansion and increased asset prices, commonly known as a bubble. As asset prices become further detached from their fundamentals, a correction occurs, leading to a sharp decline in prices and a potential market crash.

Which One of the Following Statements Is True