Bear Course Final Quiz

Choose the best answer from the available choices. One response must be selected for each question.

Which of the following is NOT a component of a bear market?

Bear markets comprise roughly 11% of major stock market trends, historically.

Bear markets last an average of about 18 months.

The big wealth management firms know what to do in bear markets, and I can rely on them to act in my specific best interest, no matter what happens to their bottom line.

They can be devastating and have long-lasting effects that hurt people long after the bear is technically over.

Which of the following are factors that make it so difficult for large money management institutions to react/adapt to bear markets?

The big firms manage billions of dollars, and they have difficulty liquidating so much invested money to protect it from bear conditions.

Large firms have shown a pattern of behavior where they protect their own money before their clients' money during economic crises.

Their business model includes keeping clients' money "working" constantly, i.e. buy-and-hold mentality, but in strong bear markets the low-risk opportunities for money to "work" are scarce.

All of the above are correct.

What are some reliable signs that a bear market is probably coming soon?

Raw data and proven chart indicators, as part of a trading system I've proven to work reliably and consistently.

Opinions that a bear market's coming, provided by "experts" on financial news channels.

A recession always startes the instant US bond yield curve becoms inverted, so looking for other signs is useless.

A recession always starts the instant US bond yield curve becoms inverted, so looking for other signs is useless.

What is the primary driver of economic crashes?

Mortgage-backed securities.

Availability of money, i.e. the money supply.

Federal reserve intervention into the free market.

Trade tariffs and international unrest.

Beyond the primary driver from your answer to question #1, what behavioral phenomenon fuels bear markets and makes them even more severe?

Rising interest rates.

People moving their $ out of the market due to an emotional fear response.

The music that young people are listening to these days. It makes no sense.

The rally speeches delivered by world leaders at press conferences.

True or False: Being prepared with the right mindset, tools, and education can help you avoid emotional decisions, even when the rest of the economy is panicking.

True.

False.

How do the cycles we observe in the natural world differ from cycles in the stock market?

They're always exactly the same.

Stocks in companies that mine natural resources never lose $ in bear markets, so who cares?

Natural cycles are governed by the laws of nature, but cycles in the stock market are unique because the stock market behaves uniquely and doesn't always conform to the laws of nature.

Natural cycles have no impact on the stock market.

How do the opinions of individual investors and the total stock market's momentum create bear market conditions?

As stock prices cycle up and down, investors disagree on the future direction of the market and it stays flat/sideways so the bear market never actually comes.

When the market slows in bear conditions, investors see it as an opportunity and everybody buys as much stock as they can, so the bear never happens.

As prices increase, investors grow optimistic and cause a booming bear market through increased buying.

As a bull market turns bearish, investors grow fearful and pull out of the market. Buying slows and selling strengthens, accelerating the crash.

How do the prices of speculative stocks generally change when a bear market starts?

Speculative stocks always hold their value, regardless of overall market conditions.

Speculative stocks generally decrease sharply in value in a bear market because their prices were artificially inflated to start with.

Speculative stocks increase in value during bear markets because they have special rules that don't follow the rest of the market.

Speculators look at a lot of numbers, so their opinions must be right and therefore I don't care if it's a bear market.

Bear Course Final Quiz

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