Question

The stock market is experiencing a bear market. Trading volume has been high for weeks. Even the most stable stocks are feeling the effects. Bellwether Company's stock price was relatively stable for decades, but it as declined recently. is the price of bellwether companies stock likely to rise or fall? please explain

Answer 1

I had to look up the term "bear market" because I was unaware of what it meant.

Bear Market = a market where prices are falling. This type of market encourages selling.


Answer: I think that because it stated in the problem stable companies were still affected, that means that Bellwether Company will be affected by the bear market falling prices. Therefore, I hypothesize that because the stock market it experiencing a bear market Bellwether's prices will continue to fall.

Did that make sense?

Answer 2

The correct assumptions will be that the stock price of Bellwether Company will continue to fall a bit before rising up again after the bear run in the market is over.

There was a stability in the stock prices of Bellwether Company before the bear run started in the market, refers that the stock prices were giving returns similar to market.

Stock market

• There are two phases in the stock market, namely, bull run and bear run. In bull run phase, the stock prices tend to go up due to buying pressure in the market.

• Under the bear run, there is a selling pressure in the market due to fewer volumes of buyers. The stock prices decline during such phase.

• It is to be noted that a change in the run happens gradually and not instantly, which says that the share prices will go a further down before moving up again.

Hence, we can say that the share prices of Bellwether Co. will increase after a slight decrease in the stock market phase of bear run before moving into bull run.

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