Describe Contagion Theory, Convergence Theory, and Emergent-Norm Theory

question 92

Essay

Describe contagion theory, convergence theory, and emergent-norm theory.What are the points of similarity and difference between these three theories? Discuss the strengths of each theory, as well as the points that may be criticized.

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Definitions:

First-day Returns

The percentage change in price of a stock or other security from its offering price on its first day of public trading.

SIPC

SIPC stands for the Securities Investor Protection Corporation, which is a nonprofit organization that insures investors' securities and cash in the event a brokerage firm goes bankrupt or faces financial difficulties.

Brokerage Firm

A company that acts as an intermediary between buyers and sellers of financial securities, providing investment services and advice.

Dark Pools

Private financial forums or exchanges for trading securities not accessible by the public.