SSC Economics Sample Paper NCERT Sample Paper-6

  • question_answer
    How do we define the terms "bull and bear" with regard to stock markets?

    A)  A bull is an optimistic operator who first buys and then sells shares in expectation of the price going up; a bear is a pessimistic market operator who sells the shares in expectation of buying them back at a lower price

    B)  There is nothing significantly different as both operate in the capital market

    C)  Bull is one who first sells a share and then buys it at a lower price; bear means one who first buys and then sells it in expectation of prices going up

    D)  A bull is ready to buy any share; a bear only deals in government securities

    Correct Answer: A

    Solution :

    [a] The terms are used to describe general actions and attitudes, or sentiment, either of an individual (bear and bull) or the market. A bear market refers to a decline in prices, usually for a period of a few months, in a single security or asset, group of securities or the securities market as a whole. A bull market is when prices are rising. The terms "bear" and "bull" are thought to derive from the way in which each animal attacks its opponents. That is, a bull will thrust its horns up into the air, while a bear will swipe down. These actions were then related metaphorically to the movement of a market: if the trend was up, it was considered a bull market; if the trend was down, it was a bear market.

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