The next asset market that will have a bubble is the stock
market.
Thanks, Chace. This is a really important point, as I suspect
that many of you do not have a lot of market experience. The
S&P 500 (aka "the stock market") dropped from about 3450 two
2200 or so in a matter of a couple of weeks (basically March 1-20),
and has since staged a monster rebound.
I have some questions as it relates to bubbles and market...
1. Define the term Financial Market and provide an example of a
Financial Market. Discuss the primary role of Financial Markets and
the people and institutions that interact in these markets.
Define the concept of sociological imagination. Provide an example
of how you would apply the sociological imagination to a current
social issue within society such as racial conflict and law
enforcement, or education funding. What is your perspective on the
issue if you use the sociological imagination?
What do economists mean by market equilibrium? Identify the
characteristics. Define a shortage and explain what will happen to
price if there is a shortage? Why does price change? Define a
surplus and explain what will happen to price if there is a
surplus. Why does price change?
What do economists mean by market equilibrium? Identify the
characteristics. Define a shortage and explain what will happen to
price if there is a shortage? Why does price change? Define a
surplus and explain what will happen to price if there is a
surplus. Why does price change?
What did you mean by "above market prices?" How do you
define "market price?" How could a seller/supplier sell their
products or services at "above market prices?"
Define the concept of Beta, provide the formula, and
provide a completed example calculation. How does Beta predict
risk, and why is it important for understanding the price of
assets?