The possibility of speculative bubbles in the stock market arises in part because
A)stock prices may not depend at all on psychological factors.
B)fundamental analysis may be the correct way to evaluate the value of stocks.
C)future streams of dividend payments are very hard to estimate.
D)the value of shares of stock depends not only on the future stream of dividend payments but also on the price at which the stock will be sold.

Question

Quizplus · Accepted Answer

Speculative bubbles can occur because estimating future dividend payments is challenging, leading to uncertainty and speculation in stock pricing.

The Possibility of Speculative Bubbles in the Stock Market Arises