When Stock Prices Decline Steadily, Investors Refer to the Market

question 64

Multiple Choice

When stock prices decline steadily, investors refer to the market as a ________ market.

• A) bear
• B) bull
• C) dog
• D) lion

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Definitions:

Default Risk Premium

The additional yield a lender demands to compensate for the risk that the borrower may default on the loan.

Liquidity Premium

Additional yield that investors demand for holding a security that is not easily traded or sold without a significant price reduction.

Maturity Risk Premium

The extra yield that investors demand to compensate for the risk of holding a bond until its maturity date.

T-bonds

Treasury bonds, long-term government debt securities with maturity periods typically over 20 years, offering interest payments semiannually.