The "Greater Fool" Theory Assumes That

question 57

Multiple Choice

The "greater fool" theory assumes that

• A) markets are efficient.
• B) bubbles cannot exist in well-organized markets.
• C) it makes sense for an investor to buy an asset as long as there is someone else to buy it later for a higher price.
• D) bond market returns are always above stock market returns.

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Definitions:

Rules

Established and authoritative principles or guidelines that govern behavior or the operation of systems or processes.

Arbitrary

Stemming from unpredictable preferences or spur-of-the-moment desires rather than through structured reasoning or organized principle.

Five Ws

A fundamental journalistic concept focusing on questions: Who, What, When, Where, and Why, to gather comprehensive information.

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