If you think the price of a share of stock reflects its true value, but you buy it anyway because you expect to be able to sell it later at a higher price, then you are participating in
A) a stock market price bubble.
B) insider trading.
C) hedging.
D) fraud.

Question

Quizplus · Accepted Answer

Participating in a stock market price bubble means buying shares of stock with the expectation of selling them at a higher price, even if the true value of the stock does not justify that price. This behavior can lead to a speculative bubble and eventual market crash. Insider trading, hedging, and fraud are different concepts with different motivations and behaviors.

If You Think the Price of a Share of Stock