A'bear' on the stock exchanges sells share in anticipation of?

Assessment: WAEC SSCE - Commerce - 1991 (Objective) Subject: Commerce

Question 1 Report

A'bear' on the stock exchanges sells share in anticipation of?
Answer Details
A 'bear' on the stock exchanges sells shares in anticipation of a fall in price. In the stock market, a 'bear' is an investor who believes that the prices of stocks or securities are going to fall in the future. To benefit from this decline in prices, the bear will sell shares that they do not own, with the expectation of buying them back later at a lower price to make a profit. This practice is known as short-selling. Therefore, a bear will sell shares in anticipation of a fall in price, while a 'bull' on the stock exchange sells shares in anticipation of a rise in price. The other options such as a change in price, the liquidation of the company concerned, or new issues, do not necessarily determine whether a bear or a bull will sell shares.

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