Which of the Following Have Been Offered as Factors Contributing

question 7

Multiple Choice

Which of the following have been offered as factors contributing to the market crash of 1987?
I.requirement for only a 10 percent cash payment to purchase a stock
II.program trading
III.irrational investors
IV.preceeding bear market

• A)I and III only
• B)I and IV only
• C)II and III only
• D)I, II, and III only
• E)I, II, and IV only

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Definitions:

Inflation

The pace at which prices for goods and services across the board go up, diminishing the value of money.

Required Rate

The minimum return an investor expects to achieve on an investment, considering its risk level and the opportunity cost of forgoing other investments.

Marginal Cost

Marginal cost refers to the increase or decrease in the total cost of producing one more unit of a good or service.

After-Tax Cost

The actual cost of an investment or loan after accounting for taxation, representing the net expense to the investor or borrower.