Why Could Leverage Lead to an Asset Price Bubble

question 14

Multiple Choice

Why could leverage lead to an asset price bubble?

• A)It allows investors to take advantage of disinflation.
• B)It takes advantage of insiders who help outsiders.
• C)It increases the ability of people to purchase financial instruments.
• D)It takes advantage of extrapolative expectations.

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Definitions:

Correlational Analysis

A statistical technique used to determine the relationship and degree of association between two variables.

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