Financial Awareness - Risk, Stability & Emerging Finance
Which of the following best describes 'herd behavior' in financial markets?
Which of the following best describes 'herd behavior' in financial markets?
medium Q6 of 15
Step-by-Step Solution
Step 1: Understand the question
The question asks for the meaning of herd behavior in markets.Step 2: Apply the concept
Herd behavior refers to investors following the majority trend, often leading to market bubbles or crashes. Regulators imposing restrictions, central bank actions, or company share issuance are unrelated.Final Answer:
Investors collectively following the majority trend → Option CQuick Check:
Herd behavior meaning = Following majority trend ✅
Quick Trick: Herd means group acting together.
Common Mistakes:
- Confusing herd behavior with regulatory actions.
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