When investors become irrationally optimistic that an asset's price will continue to rise,it causes a financial bubble:

Question

Quizplus · Accepted Answer

When investors become irrationally optimistic and start buying an asset, the demand for that asset increases, causing its price to rise. As the price rises, more investors will be attracted to the asset, further driving up the price. This cycle continues until the price of the asset reaches unsustainable levels, which is when the asset bubble starts to inflate.

When Investors Become Irrationally Optimistic That an Asset's Price Will