Which of the following is(are)the characteristics of a bubble
A)Bubbles emerge when investors disagree about the particular economic importance of an event
B)Bubbles involve very large increases in trading volume
C)Bubbles may continue even when many expect a bubble and doesn't pop until a sufficient number of skeptical investors act simultaneously
D)All of the above

Question

​Which of the following is(are)the characteristics of a bubble
A)​Bubbles emerge when investors disagree about the particular economic importance of an event
B)Bubbles involve very large increases in trading volume
C)Bubbles may continue even when many expect a bubble and doesn't pop until a sufficient number of skeptical investors act simultaneously
D)​All of the above

Quizplus · Accepted Answer

All three characteristics listed (A, B, and C) are typical of bubbles. Bubbles often arise from disagreement among investors about the true economic significance of an event, resulting in increased trading volume as investors flock to buy in (B). It is said that a bubble can only truly pop when a sufficient number of skeptical investors act at the same time, indicating that bubbles can persist even in the face of widespread skepticism (C).

​Which of the Following Is(are)the Characteristics of a Bubble

Which of the Following Is(are)the Characteristics of a Bubble