The Stock Market Crash of October 1987 and the Great

question 42

Multiple Choice

The stock market crash of October 1987 and the Great Crash of 1929, although not fully explained, may be (partially) explained by:

• A) new information coming to the market; being efficient the market was priced down.
• B) technical difficulties in order processing.
• C) the bubble theory that prices move wildly above equilibrium values and eventually fall back to equilibrium causing large losses.
• D) the conspiracy theory that large institutions and rich investors control the market and caused the general population to suffer large wealth losses.

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Definitions:

Vicariously Liable

A legal principle where one party is held responsible for the actions or omissions of another party, often used in employer-employee relations.

Wrongful Acts

Actions or behaviors that are illegal or morally incorrect according to societal norms.

Partnership Business

A sanctioned business model that entails a partnership between individuals, distributing both management roles and profit allocations.

Innocent Partner

A member of a partnership who is not aware of any wrongful behavior or fraudulent activity committed by their partner(s) within the business operations.