Lei, Noussair and Plott's "excess trading" hypothesis regarding trading in financial asset markets relates to which of the following?
A) Lots of shares change hands during a price boom, but not during the crash.
B) Traders may engage in large volumes of buying and selling primarily because there is nothing else to do during the course of the experiment to keep them occupied.
C) The familiar bubble and crash pattern occurs in markets for financial assets primarily because buyers can only purchase but not sell assets while and sellers can only sell but not purchase assets.
D) Contrary to the efficient markets hypothesis, average market price tends to peak toward the end of the experimental session.

Question

Quizplus · Accepted Answer

The "excess trading" hypothesis by Lei, Noussair, and Plott suggests that traders engage in high volumes of trading not necessarily because of market signals or rational investment strategies, but due to a lack of alternative activities to occupy their time during the experiment.

Lei, Noussair and Plott's "Excess Trading" Hypothesis Regarding Trading in Financial