Question 1

A speculative bubble is usually caused by which of the following? Select all that apply:

Accepted Answer

A)  Exaggerated expectations of future growth.
B)  Price appreciation.
C)  An increase in asset values.
D)  Higher trading volumes.
E)  All of the aboveF) C) and E)
G) A) and E) E

Question 2

A financial bubble happens only because of irrational behaviors of investors, such as herding activities or outright foolishness.

Accepted Answer

A) True 
 B)False

Question 3

The main reason that led to the collapse of the oldest merchant bank in England, Barings Bank, in 1995 after 233 years of existence was...

Accepted Answer

A)  A bank run.
B)  A change in the board of directors, which caused a confidence crisis among the public.
C)  An unauthorized speculation by one employee on future contracts.
D)  The Kobe earthquake in Japan, which led to a financial crisis in Asia and hence, severely affected the bank's activities.E) A) and D)
F) A) and B) C

Question 4

The Dutch tulip bulb crisis (AKA "Tulipmania")  in February 1637, happened as the contract prices for Tulip bulbs soared from November 1636 to January 1637 and suddenly collapsed in February 1637. What does the case illustrate?

Accepted Answer

A)  Frenzy optimism about the growth in Tulip bulb prices.
B)  A speculative bubble.
C)  Irrational investing.
D)  A confidence crisis.E) A) and D)
F) B) and C)

Question 5

Which of the following events fueled the Asian Financial crisis in 1997?

Accepted Answer

A)  The war between Indonesia and West Timor.
B)  The Thai government decided to float its currency, the Baht.
C)  Brunei stopped selling its oil to neighboring countries.
D)  A political uproar in the Philippines.E) A) and B)
F) None of the above B

Exam 3: Bubble

A speculative bubble is usually caused by which of the following? Select all that apply:

Correct Answer
verified
E

A financial bubble happens only because of irrational behaviors of investors, such as herding activities or outright foolishness.

Correct Answer
verified

The main reason that led to the collapse of the oldest merchant bank in England, Barings Bank, in 1995 after 233 years of existence was...

Correct Answer
verified
C

The Dutch tulip bulb crisis (AKA "Tulipmania") in February 1637, happened as the contract prices for Tulip bulbs soared from November 1636 to January 1637 and suddenly collapsed in February 1637. What does the case illustrate?

Correct Answer
verified

Which of the following events fueled the Asian Financial crisis in 1997?

Correct Answer
verified
B

Exam 3: Bubble

A speculative bubble is usually caused by which of the following? Select all that apply:

Correct AnswerverifiedE

A financial bubble happens only because of irrational behaviors of investors, such as herding activities or outright foolishness.

Correct AnswerverifiedShow Answer

The main reason that led to the collapse of the oldest merchant bank in England, Barings Bank, in 1995 after 233 years of existence was...

Correct AnswerverifiedC

The Dutch tulip bulb crisis (AKA "Tulipmania") in February 1637, happened as the contract prices for Tulip bulbs soared from November 1636 to January 1637 and suddenly collapsed in February 1637. What does the case illustrate?

Correct AnswerverifiedShow Answer

Which of the following events fueled the Asian Financial crisis in 1997?

Correct AnswerverifiedB

Correct Answer
verified
E

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified
B