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1.
The net advance measures the difference between the number of stocks advancing in price and the number declining in price.
True. From this comes the advance-decline line.
2.
Emotions can contribute to bull and bear markets.
True. Aspects of investor psychology, such as emotions, can drive people to value stocks very high or very low.
3.
If you believe in "buying low and selling high," at which of the following points should you sell your stock?
When the stock begins to move downward. This signals that the bull market may be reversing, although it is never certain. This signal is not present during the other situations mentioned, because they may just be periods of slow growth.
4.
One way to profit during a bear market is to buy the stocks of companies that perform well in both bull and bear markets. What are these stocks called?
Defensive stocks. They can go by many names. The most common is "defensive stocks."
5.
Which of the following does not contribute to bull or bear markets?
Past bull or bear markets. Only present behavior can determine such markets.