THE GREAT DEPRESSION 1929 1940
THE GREAT DEPRESSION
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
People will buy and sell products
|
|
|
People who failed to earn investment profits were call “Bigger Fools”
|
|
|
Someone will always be willing to pay more than what you paid for a stock
|
|
|
Market investors and speculators will always be in conflict
|
Detailed explanation-1: -The Greater Fool Theory is the idea that, during a market bubble, one can make money by buying overvalued assets and selling them for a prot later, because it will always be possible to nd someone who is willing to pay a higher price.
Detailed explanation-2: -Key Takeaways. The efficient market hypothesis (EMH) or theory states that share prices reflect all information. The EMH hypothesizes that stocks trade at their fair market value on exchanges. Proponents of EMH posit that investors benefit from investing in a low-cost, passive portfolio.
Detailed explanation-3: -This effect was explained by economics professor Burton Malkiel in his book A Random Walk Down Wall Street: A bubble starts when any group of stocks, in this case those associated with the excitement of the Internet, begin to rise.
Detailed explanation-4: -People are not buying the asset for the cash it generates but, rather, with the expectation that they will be able to sell it quickly at a higher price. This is the Greater Fool Theory: Pay a foolish price because you hope to sell to an even bigger fool.