Which of the following is TRUE of speculative bubbles in stockprices?
A)They are easy to detect by simply looking at the trends in stock prices.
B)They can never be detected even after they occur.
C)They are difficult to detect until after they burst.(True Answer )Correct
D)They never exist in stock markets.

Question

Quizplus · Accepted Answer

Speculative bubbles in stock prices are difficult to detect until after they burst. This is because during the bubble, investors become overly optimistic about the potential for profits and start buying rapidly, driving up prices. It is only once these prices begin to fall and the bubble bursts that investors realize their mistake and recognize the bubble for what it was. Therefore, it is generally very difficult to detect a speculative bubble in advance.

Which of the Following Is TRUE of Speculative Bubbles in Stockprices