Which of the Following Is Correct Concerning Stock Market Irrationality

question 13

Multiple Choice

Which of the following is correct concerning stock market irrationality?

• A)Bubbles could arise,in part,because the price that people pay for stock depends on what they think someone else will pay for it in the future.
• B)Economists almost all agree that the evidence for stock market irrationality is convincing and the departures from rational pricing are important.
• C)Some evidence for the existence of market irrationality is that informed and presumably rational managers of mutual funds generally beat the market.
• D)All of the above are correct.

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Definitions:

Manufacturing Costs

The total expenses involved in the process of producing goods, including raw materials, labor, and overhead costs.

Financing

The process of providing or obtaining the funds necessary for investment, expansion, or operations.

Repayments

Amounts of money paid back to lenders or creditors in partial or full settlement of a loan or debt.

Cash Collections

The process of gathering all cash payments received from customers as a result of sales or other transactions.