Behavior True False Asset bubbles tend to be corrected by a reversion of market prices toward the asset's intrinsic price-although this price correction is often slower than it should be in an informationally efficient market. Later in the development of a market bubble, asset prices are affected more by the trading behaviors of inexperienced and naive investors and speculators than from the investment activities of longer-term, experienced and more knowledgeable market participants. Newer investors in a market exhibiting a bubble tend to realize greater profits than investors or speculators who have been in the market for a much longer period.
Behavior True False Asset bubbles tend to be corrected by a reversion of market prices toward the asset's intrinsic price-although this price correction is often slower than it should be in an informationally efficient market. Later in the development of a market bubble, asset prices are affected more by the trading behaviors of inexperienced and naive investors and speculators than from the investment activities of longer-term, experienced and more knowledgeable market participants. Newer investors in a market exhibiting a bubble tend to realize greater profits than investors or speculators who have been in the market for a much longer period.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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True/False
Transcribed Image Text:Behavior
True
False
Asset bubbles tend to be corrected by a reversion of market prices toward the asset's intrinsic price-although this price
correction is often slower than it should be in an informationally efficient market.
Later in the development of a market bubble, asset prices are affected more by the trading behaviors of inexperienced and naive
investors and speculators than from the investment activities of longer-term, experienced and more knowledgeable market
participants.
Newer investors in a market exhibiting a bubble tend to realize greater profits than investors or speculators who have been in
the market for a much longer period.
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