A _____ develops when investor enthusiasm drives asset prices up above their true fundamental value in a belief that prices will continue to rise.

Question

Quizplus · Accepted Answer

A bubble occurs when asset prices are driven significantly above their intrinsic value by investor enthusiasm, speculation, or other factors, with the expectation that prices will continue to rise. This phenomenon is characterized by rapid increases in asset prices followed by a contraction or "bursting" of the bubble when the prices abruptly fall.

A _____ Develops When Investor Enthusiasm Drives Asset Prices Up