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.
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.
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.
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.