The rise of the dot-coms in the late 1990s is probably due to:
A) investors reducing their expectations from common stocks.
B) investors being reluctant to incur losses and being overconfident.
C) a sharp improvement in the prospects for dividend growth.
D) the efficiency of the markets.

Question

Quizplus · Accepted Answer

The rise of the dot-coms in the late 1990s was due to investors being overconfident and reluctant to incur losses. This led to a speculative investment bubble, which eventually burst in 2000. The dot-com companies were largely unprofitable and overvalued, and many investors lost large sums of money. This was not due to investors reducing their expectations from common stocks, a sharp improvement in the prospects for dividend growth, or the efficiency of the markets.

The Rise of the Dot-Coms in the Late 1990s Is