Basics Intermediate:
Understanding Bull and Bear Markets
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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.
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True
False
True. From this comes the advance-decline line.
2.
Which of the following does not contribute to bull or bear markets?
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The supply of available securities
The influence of government
Investor demand for securities
Past bull or bear markets
Past bull or bear markets. Only present behavior can determine such markets.
3.
A portfolio with a lot of stocks can be very profitable during a bull market.
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True
False
True. Stocks are able to take advantage of growth because they are made of shares, which typically grow in value during bull markets.
4.
Why do bonds perform well during bear markets?
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Their returns rise during bear markets
Their returns stay the same
They keep stock prices up
They don't
Their returns stay the same. Bond returns are fixed no matter what the market. They can't rise or fall.
5.
Economists and market-watchers use a practice called _______ to help them predict stock values.
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The Dow theory
Technical analysis
The Dow Jones Industrial Average
Technical analysis. This is the use of market data to analyze individual stocks and the market as a whole.
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