Bubble theory

Definition:

A theory under which security prices sometimes move wildly above their true values, or the price falls sharply until the "bubble bursts". It is also possible for a bubble to deflate gradually.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Distressed securities

A security of a firm that has declared or is about to declare bankruptcy. In the context of hedge funds, a style of management that focuses on securities of companies that have declared bankruptcy... Read More

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