Which among the following statements are correct regarding share market operations?

1. Bear is a person who speculates share prices to fall in future and so sells his shares and earns a profit.
2. Bull is a person who speculates share prices to go up in future so either stops selling selected shares for a time period.
3. A Bull increases the number of shares in a stock market.
4. A Bear creates a scarcity of shares in the stock market.

The correct statements are:

Question

Which among the following statements are correct regarding share market operations?

1. Bear is a person who speculates share prices to fall in future and so sells his shares and earns a profit.

2. Bull is a person who speculates share prices to go up in future so either stops selling selected shares for a time period.

3. A Bull increases the number of shares in a stock market.

4. A Bear creates a scarcity of shares in the stock market.

The correct statements are:

Quintessence Classes · Accepted Answer

The correct answer is 1 and 2. Detailed Analysis of the Statements:Statement 1 is Correct: A Bear is a pessimistic speculator. They believe that the prices of securities will fall in the near future. To capitalize on this, they sell shares (often through short-selling) with the intention of buying them back later at a lower price, thus pocketing the difference as profit. Their action of selling "heavy" puts downward pressure on the market.Statement 2 is Correct: A Bull is an optimistic speculator. They expect share prices to rise. To benefit from this, they buy shares or hold onto their existing portfolio (avoiding sales) to sell them later at a higher peak. Their buying activity drives prices upward.Statement 3 is Incorrect: A Bull does not "increase the number of shares" in the market. The total number of shares is determined by the issuing companies (via IPOs or FPOs). A Bull increases the demand for shares, not the supply or the absolute quantity available in the market.Statement 4 is Incorrect: A Bear does not create a "scarcity" of shares. Scarcity occurs when demand exceeds supply. Since Bears are selling their holdings or short-selling, they are actually increasing the supply of shares available on the exchange, which is what leads to a price drop.

Answer

1, 2 and 3

Answer

1, 3 and 4

Answer

1, 2, 3 and 4

Answer & Explanation

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JKPSC JKAS 2022 Prelims

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