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.
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.
2.
Economists and market-watchers use a practice called _______ to help them predict stock values.
Choose wisely. There is only one correct answer.
Technical analysis. This is the use of market data to analyze individual stocks and the market as a whole.
3.
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.
4.
If you believe in "buying low and selling high," at which of the following points should you sell your stock?
Choose wisely. There is only one correct answer.
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.
5.
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.