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Investing Basics Intermediate: Understanding Bull and Bear Markets

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1.
Which of the following does not contribute to bull or bear markets?
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Past bull or bear markets. Only present behavior can determine such markets.
2.
Selling short involves _______.
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Selling when prices are high and buying when prices fall. This is the reverse of the buy low, sell high strategy. It attempts to take advantage of falling prices.
3.
Bull market investors seek _______ more than anything.
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Growth. Bull markets are about rising prices, and rising prices are what growth is about. Therefore, income and dividends are secondary.
4.
Emotions can contribute to bull and bear markets.
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True. Aspects of investor psychology, such as emotions, can drive people to value stocks very high or very low.
5.
What does the advance-decline line use to forecast market trends?
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A net advance. This figure measures the difference between the number of stocks advancing in price and the number declining in price.