Question content area

Part $1$

The bubble that results from an informational cascade can in fact be rational since

Part $2$

A$.$

investors early in the chain may have obtained information that increases the expected gain to an investor down the chain.

B$.$

the risk is$$ small, and only a few investors will underestimate that risk.

C$.$

investors know that the bubble will yield a negative return.

D$.$

all of the above.