In the parlance of financial investments, the term 'bear' denotes
- A.An investor who feels that the price of a particular security is going to fall
- B.An investor who expects the price of particular shares to rise
- C.A shareholder or a bondholder who has an interest in a company, financial or otherwise
- D.Any lender whether by making a loan or buying a bond
Correct answer
Explanation
The correct answer is A, an investor who feels that the price of a particular security is going to fall. A bear expects prices to slide and therefore sells, hoping to buy the same security back cheaper, which is why a falling market is called a bear market. The name is said to come from the bear striking downward with its paws, against the bull that tosses its horns upward. On Indian exchanges a bear typically sells short, and a spell of heavy selling that drags prices down is called a bear hug or a bear raid. B is wrong because an investor who expects prices to rise is a bull. C is wrong because a person holding a share or a bond and so having an interest in the company is a stakeholder. D is wrong because one who lends money or buys a bond is a creditor. Exam tip: bear sells expecting a fall, bull buys expecting a rise; Dalal Street carries statues of both.
Practice Questions
View allAccording to the law of diminishing marginal utility, as the amount of a good consumed increases, the marginal utility of that good tends to
- A.improve
- B.diminish
- C.remain constant
- D.first diminish and then improve
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Each extra unit of a good gives a consumer less additional satisfaction than the unit before it, so marginal utility falls as consumption rises.
Read the full explanation →Consider the following statements about impact of tax : 1. A tax is shifted forward to consumers if the demand is inelastic relative to supply. 2. A tax is shifted backward to producers if the supply is relatively more inelastic than demand. Which of the statements given above is/are correct?
- A.1 only
- B.2 only
- C.Both 1 and 2
- D.Neither 1 nor 2
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The burden of a tax falls more heavily on whichever side of the market is less elastic, the side that cannot easily walk away.
Read the full explanation →UBI, as an alternative for subsidies in poverty alleviation, stands for
- A.Union Basic Income
- B.Undefined Basic Income
- C.Unconditional Basic Income
- D.Universal Basic Income
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UBI is the idea of paying every citizen a fixed sum of money regularly, without conditions, in place of a large number of separate subsidies and welfare schemes.
Read the full explanation →Who among the following is the Chairman of the Fourteenth Finance Commission?
- A.C. Rangarajan
- B.Vijay Kelkar
- C.Y. V. Reddy
- D.Rakesh Mohan
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The Fourteenth Finance Commission, set up in 2013 for the award period 2015-2020, was chaired by Y. V. Reddy, a former Governor of the Reserve Bank of India.
Read the full explanation →Why was constitutional amendment needed for introducing GST?
- A.States were not willing to agree with the Union for introduction of GST without amendment in the Constitution.
- B.GST was to be implemented on concurrent base and Article 246 was inadequate for such a case.
- C.The Empowered Committee of Finance Ministers had recommended for constitutional amendment.
- D.The GST Council had recommended for constitutional amendment so that its power enhances.
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GST is levied by the Union and the States together on the same supply, and Article 246, which splits taxing powers between them through separate lists, did not allow such a concurrent tax.
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