Answered step by step
Verified Expert Solution
Question
1 Approved Answer
As we learned in the article, when there are more buyers in the market the stock prices tend to rise because of supply and demand.
As we learned in the article, when there are more buyers in the market the stock prices tend to rise because of supply and demand. The drastic change of supply and demand is reflected on the short-term investors within the market because they are studying the market trends and relevant news. These short-term investors' decisions, whether rational or not, have a significant impact on demand thus steering the price. For example, if short-term investors hear that a company's quarterly earnings are going to increase, they may opt to buy into the stock thus driving up the price. Even though the price increased, the value of the company did not increase because there is no guarantee that the earnings are definite
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started