FBLA Securities and Investments Practice Test 2025 – The Complete All-In-One Guide for Exam Success!

The term 'bull market' signifies a period of rising prices and strong investor confidence. In a bull market, the prices of securities typically increase, reflecting a favorable economic environment and positive sentiment among investors. This leads to increased buying activity, as investors are encouraged by the expectation that prices will continue to rise.

The underlying optimism in a bull market can stem from various factors, such as strong economic indicators, favorable news about specific sectors, or a general sense of growth in the economy. The psychology of investors plays a crucial role here, as confidence drives more participation in the market, further contributing to the upward trend in prices. This phenomenon can lead to a self-reinforcing cycle where rising prices attract more investors, perpetuating the market rally.

In contrast, other options describe situations that do not characterize a bull market; falling prices, stagnation, or a lack of transactions indicate bearish conditions or market inactivity, which are not synonymous with the positive dynamics of a bull market.