Question

Match each term below with its correct definition.

Answer 1

Crash: a crash is a major decreases in stock prices in the stock market. This results to sudden devaluation of assets. This phenomena is often caused by a continuous increase of stock prices, companies' P/E ratio exceed long term averages, war, and natural disasters sweeping through highly productive economic areas.  

Bubble: stock prices that are higher than their real value. A bubble usually occurs when investors greatly raise a certain stock's price which is way beyond it's original worth. When no more investors are willing to buy the stocks, a massive crash often occurs next as the stockholders hastily convert the stocks to cash. 
    
Bull Market: it is the upward trend in stock prices. This trend usually occurs when an economy is experiencing growth or exhibiting strength. During a Bull Market, unemployment is expected to drop with the gross domestic product increasing. The supply is weak while the demand continues on increasing. Investors are more inclined to buy stocks in the market and benefit greatly by selling the stocks when the price has reached its peak. 

Bear Market: Downward trend in stock prices. A bear market often signifies a weak, sluggish struggling economy. Unemployment increases while business profits are dropping. During a bear market, investors can make gains by loaning shares, selling them at a higher price, and then buying it back again. 

Answer 2

The correct answer for the question that is being presented above is this one: 

Here is the correct matching of definitions.

A. A crash (Major decrease in stock prices)
B. A bubble (Stock prices that are higher than their real value)
C. Bull Market (Upward trend in stock prices)
D. Bear Market (Downward trend in stock prices)