Whenever a set of stock prices go unnaturally high and subsequently crash down, the market experiences what we call a(n)
A)financial meltdown.
B)irrational behavior.
C)stock market bubble.
D)none of these choices are complete.

Question

Quizplus · Accepted Answer

A stock market bubble occurs when there is a rapid increase in the prices of stocks, driven by an increased demand for them, resulting in overvaluation. When the bubble bursts, prices plummet, resulting in a stock market crash. Therefore, a bubble is the appropriate term used to describe a situation where stock prices go unnaturally high and then suddenly crash down. Option A is too general, and option B is too vague. Option D is incorrect because one of the choices is complete.

Whenever a Set of Stock Prices Go Unnaturally High and Subsequently