In the parlance of financial investments, the term ‘bear’ denotes
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
(a)
In the context of financial investments, the term `bear` denotes an investor who feels that the price of a particular security, such as a stock or bond, is going to fall. Such investors are sometimes called “bearish” because they believe that the market is headed for a downturn or that a particular security is overvalued and due for a correction. Bears may sell short a security, which involves borrowing shares and selling them in the expectation that they can be bought back at a lower price to repay the loan. This can be a profitable strategy if the investor`s bearish outlook is correct, but it also involves significant risk if the market moves in the opposite direction.
Microtheme: Finance/Capital Market —
19 questions asked in Prelims in the past.