Basics Intermediate: Understanding Bull and Bear Markets

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
The net advance measures the difference between the number of stocks advancing in price and the number declining in price.
Choose wisely. There is only one correct answer.
True. From this comes the advance-decline line.
2.
Emotions can contribute to bull and bear markets.
Choose wisely. There is only one correct answer.
True. Aspects of investor psychology, such as emotions, can drive people to value stocks very high or very low.
3.
Why do bonds perform well during bear markets?
Choose wisely. There is only one correct answer.
Their returns stay the same. Bond returns are fixed no matter what the market. They can't rise or fall.
4.
A portfolio with a lot of stocks can be very profitable during a bull market.
Choose wisely. There is only one correct answer.
True. Stocks are able to take advantage of growth because they are made of shares, which typically grow in value during bull markets.
5.
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?
Choose wisely. There is only one correct answer.
Defensive stocks. They can go by many names. The most common is "defensive stocks."