Use your new knowledge to predict how stock prices will change following certain events in the economy.
1. Acme Company just had a very successful IPO. Initial shares sold at a price far above their realistic value. The “buzz” on the streets is that this is a very promising stock. Demand for the stock is high and rising. Is the price of Acme Company's stock likely to rise or fall? Explain your prediction.

Question

Use your new knowledge to predict how stock prices will change following certain events in the economy.
1.	Acme Company just had a very successful IPO. Initial shares sold at a price far above their realistic value. The “buzz” on the streets is that this is a very promising stock. Demand for the stock is high and rising. Is the price of Acme Company's stock likely to rise or fall? Explain your prediction.

priths · Answer

The demand of the stock is likely to rise . It follows the simple principle of the Law of Demand .
When we say that the demand of the stock is rising and is high, the prices of the stock are definitely going to rise as this situation is in consonance with the Law of Demand.