The Possibility of Speculative Bubbles in the Stock Market Arises

question 37

Multiple Choice

The possibility of speculative bubbles in the stock market arises in part because

• A)stock prices may not depend at all on psychological factors.
• B)fundamental analysis may be the correct way to evaluate the value of stocks.
• C)future streams of dividend payments are very hard to estimate.
• D)the value of shares of stock depends not only on the future stream of dividend payments but also on the price at which the stock will be sold.

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Definitions:

Ethical

Pertaining to or dealing with morals or the principles of morality; concerning right and wrong behavior.

Greatest Good

A principle often associated with utilitarianism, emphasizing actions that maximize happiness or benefits for the largest number of people.

Due Process

A legal principle ensuring fair treatment through the normal judicial system, especially as a citizen's entitlement.

Denied

The refusal to grant a request or deny access to resources or rights.