An Important Lesson from the Black Monday Crash of 1987

question 16

Multiple Choice

An important lesson from the Black Monday Crash of 1987 and the tech crash of 2000 is that

• A) factors other than market fundamentals affect stock prices.
• B) the strong version of the efficient market hypothesis, that stock prices reflect the true fundamental value of securities, is correct.
• C) market psychology has little if any effect on stock prices.
• D) there is no such thing as a rational bubble.

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Definitions:

Opinion Poll

A survey designed to gauge public opinion on various topics or preferences, often used in politics, marketing, and social research.

Canadian Politics

The political structure, parties, and processes within Canada, governed by a parliamentary democracy and a constitutional monarchy.

Pluralist Theory

A political theory suggesting that power is distributed among diverse groups in society, allowing for multiple interests and viewpoints to be represented.

Sociologists

Professionals who study social behavior, institutions, and structures, focusing on understanding how human actions and consciousness both shape and are shaped by surrounding cultural and social structures.