Question

When investors follow a "herd instinct," they:________A. invest in something as a group, making it appear more valuable than it is.B. make decisions as a group, inflating the prices of goods somewhat arbitrarily.C. invest in something simply because everyone else is doing it.D. None of these statements is true.

Answer 1

The option is C is correct

Step-by-step explanation:

Herd instinct refers to an inclination in people to think or reason like the majority.

When investors follow a herd instinct it simply mean that they invest in something simply because everyone is doing it. this is to say that an investor or investors is ready to take certain risk in any business that is seen as profitable on the long run or time period.

If the business is profitable and is seen as a good investment, in which everyone or investors are actively participating on it. other investors will key into the idea.