- 15 Marks
FM – March 2023 – L2 – Q3c – Financial markets
Identify and distinguish between bear and bull markets, and recommend investment strategies for a bull market.
Question
Recently, the major stock indexes like the S&P 500 and DJIA declined in value continuously during the first quarter of 2021 when most economies were battling the devastating effects of the COVID-19 pandemic. A similar situation happened between 2007 and 2009 when the global credit crunch occurred.
Required:
i) State the type of market condition (i.e., a bear or a bull) described in the above preamble. (1 mark)
ii) Distinguish between a bear market and a bull market. (5 marks)
iii) Recommend to a portfolio investor TWO (2) investment strategies that can be employed to take advantage of a bull market. (4 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Bear market, Bull market, Investment strategies, Market conditions
- Level: Level 2
- Topic: Financial markets
- Series: MAR 2023
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