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2. What is a stock market bubble? What causes a bubble? Why does a crash generally follow a bubble?

Respuesta :

A stock market bubble is a period of growth in stock prices followed by a fall. They often form when traders enter a self-sustaining cycle of growth. They gain momentum as more and more participants enter the market.
cyd887
Typically, a bubble is created by a surge in asset prices that is driven by exuberant market behavior. During a bubble, assets typically trade at a price, or within a price range, that greatly exceeds the asset's intrinsic value (the price does not align with the fundamentals of the asset).