All of the Following Are Possible Consequences of Noise Traders

question 48

Multiple Choice

All of the following are possible consequences of noise traders EXCEPT

• A) increased volatility in the financial market.
• B) asset prices differing from fundamental values.
• C) herd behavior contributing to speculative bubbles.
• D) reduced volatility of asset prices.

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Definitions:

Tragedy Of The Commons

A situation in which individual users, acting independently according to their own self-interest, deplete or spoil shared resources, leading to long-term depletion or damage for all users.

Public Asset

Resources or properties owned by the government or a public entity, meant to provide benefits or services to the community.

Emerging Economies

Nations with social or business activity in the process of rapid growth and industrialization, often characterized by low but increasing gross domestic product (GDP).

Climate Change

A significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years.