THE GREAT DEPRESSION 1929 1940
THE GREAT DEPRESSION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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giving out loans they knew would not be paid back
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valuing stocks to be worth more than they actually were
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buying stocks on credit
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not insuring customers’ money
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Detailed explanation-1: -Overvalued stocks are usually stocks in which investors have high expectations. These stocks usually trade at high PE and PB ratios and offer low dividend yields. They are often very popular stocks in the market. They don’t offer much margin of safety as most investors are interested in buying them.
Detailed explanation-2: -Meaning of overvaluation in English the act of putting too high a value on something : The prices of some technology shares were ridiculously high, and there was a limit as to how long these overvaluations could continue.
Detailed explanation-3: -If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.
Detailed explanation-4: -Unreasonable prices It means that speculation may lead to price fluctuations that, even though they are merely temporary, can have a long-term impact on the fortunes and stability of a company, an industry, or even a whole economy.