Which of the Following Is Correct Concerning Stock Market Irrationality

question 13

Multiple Choice

Which of the following is correct concerning stock market irrationality?

• A)Bubbles could arise,in part,because the price that people pay for stock depends on what they think someone else will pay for it in the future.
• B)Economists almost all agree that the evidence for stock market irrationality is convincing and the departures from rational pricing are important.
• C)Some evidence for the existence of market irrationality is that informed and presumably rational managers of mutual funds generally beat the market.
• D)All of the above are correct.

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Definitions:

Return

The process of a customer bringing back a purchased product to the seller for a refund, exchange, or credit.

Project

A temporary endeavor undertaken to create a unique product, service, or result, often within constraints of time, quality, and budget.

Annual Return

The percentage change in an investment's value over a one-year period, including dividends and interest.

Future Value

The value of an investment at a specified date in the future, taking into account factors like compound interest or returns.