D.29 Market cycles Flashcards
Learners will be able to identify and describe the various phases of market cycles, including expansion, peak, contraction, and trough, and explain how these phases can impact investment decisions and financial planning strategies.
Which of the following best describes a bear market?
A. A prolonged period of rising prices
B. A sudden drop in prices followed by a sharp recovery
C. A prolonged period of falling prices
D. A market characterized by high levels of volatility
C. A prolonged period of falling prices
D.29 Market cycles
Which of the following is a typical characteristic of a bull market?
A. High levels of volatility
B. Falling prices
C. A prolonged period of rising prices
D. A period of uncertainty and low investor confidence
C. A prolonged period of rising prices
D.29 Market cycles
What is a typical characteristic of the accumulation phase of a market cycle?
A. High levels of investor optimism and confidence
B. Rising stock prices
C. Increasing trading volume
D. A decline in investor confidence and pessimism
D. A decline in investor confidence and pessimism
D.29 Market cycles
During which market cycle phase are investors typically most cautious and risk-averse?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
C. Distribution
D.29 Market cycles
Which of the following is a typical characteristic of a market bottom?
A. High levels of investor confidence and optimism
B. A significant increase in trading volume
C. A rapid increase in stock prices
D. A decline in stock prices followed by a period of stability
B. A significant increase in trading volume
D.29 Market cycles
During which phase of the market cycle do prices typically rise the most rapidly?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
B. Markup
D.29 Market cycles
Which of the following is a typical characteristic of a market top?
A. Low levels of investor optimism and confidence
B. A rapid increase in trading volume
C. A significant decline in stock prices
D. A period of stability and low volatility
B. A rapid increase in trading volume
D.29 Market cycles
During which phase of the market cycle are investors typically most optimistic and willing to take risks?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
B. Markup
D.29 Market cycles
Which of the following is a typical characteristic of a market crash?
A. A sudden drop in prices followed by a rapid recovery
B. A gradual decline in prices over a period of months
C. A decline in trading volume
D. High levels of investor confidence and optimism
B. A gradual decline in prices over a period of months
D.29 Market cycles
During which market cycle phase do prices typically decline the most rapidly?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
D. Markdown
D.29 Market cycles
John is an investor who believes that the market is currently in a bear phase. What investment strategy is most appropriate for him?
A. Invest aggressively in high-risk stocks
B. Hold cash and wait for the market to recover
C. Invest conservatively in low-risk stocks
D. Buy stocks in industries that are performing well
C. Invest conservatively in low-risk stocks
D.29 Market cycles
Mary has just invested in a stock that has been performing well over the past few months. What phase of the market cycle is the stock most likely in?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
B. Markup
D.29 Market cycles
Tom is an investor who is looking to buy a stock that he believes is currently undervalued. What phase of the market cycle is the stock most likely in?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
A. Accumulation
D.29 Market cycles
Jane is an investor who has been holding onto a stock for several years. She believes that the stock is overvalued and is considering selling it. What phase of the market cycle is the stock most likely in?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
C. Distribution
D.29 Market cycles
Mike is an investor who is considering buying a stock that has been declining in value over the past few months. What phase of the market cycle is the stock most likely in?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
D. Markdown
D.29 Market cycles
Lisa is an investor who has been investing in high-risk stocks that have been performing well. What phase of the market cycle is the market most likely in?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
B. Markup
D.29 Market cycles
John has invested in a stock that has been declining in value over the past few months. He believes that the stock is undervalued and is considering buying more shares. What phase of the market cycle is the stock most likely in?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
D. Markdown
D.29 Market cycles
Sarah is an investor who is considering selling a stock that has been performing well over the past few months. What phase of the market cycle is the stock most likely in?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
D. Markdown
D.29 Market cycles
Sarah is an investor who is considering selling a stock that has been performing well over the past few months. What phase of the market cycle is the stock most likely in?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
B. Markup
D.29 Market cycles
Emily is an investor who has just sold a stock that she believes is overvalued. What phase of the market cycle is the stock most likely in?
A. Accumulation
B. Markup
C. Distribution
D. Markdown
Distribution
D.29 Market cycles
