[amp_mcq option1=”conditional” option2=”inefficient portfolio” option3=”too low” option4=”too high” correct=”option2″]<\/p>\n
Rational traders immediately sell stock when price is too high<\/strong>. This is because they believe that the price of the stock is overvalued and that it is likely to go down in the future. By selling the stock, they can lock in their profits and avoid potential losses.<\/p>\n Option A, “conditional”, is incorrect because it does not specify what the condition is. It is possible that a rational trader would sell a stock if the price is conditional on some event, but it is also possible that they would not.<\/p>\n Option B, “inefficient portfolio”, is incorrect because it does not take into account the trader’s risk tolerance. A rational trader may choose to hold an inefficient portfolio if they are comfortable with the risk.<\/p>\n Option C, “too low”, is incorrect because it does not take into account the trader’s expectations for the future price of the stock. A rational trader may choose to hold a stock even if the price is low if they believe that the price is likely to go up in the future.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”conditional” option2=”inefficient portfolio” option3=”too low” option4=”too high” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-45787","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n