Basics Intermediate: Understanding Bull and Bear Markets

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1.
A portfolio with a lot of stocks can be very profitable during a bull market.
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True. Stocks are able to take advantage of growth because they are made of shares, which typically grow in value during bull markets.
2.
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.
3.
Why do bonds perform well during bear markets?
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Their returns stay the same. Bond returns are fixed no matter what the market. They can't rise or fall.
4.
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.
5.
Economists and market-watchers use a practice called _______ to help them predict stock values.
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Technical analysis. This is the use of market data to analyze individual stocks and the market as a whole.