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15 May 2025, 08:52
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Question 1
C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
75%
(hard)
Question Stats:
34% (02:33) correct
66%
(02:38) wrong
based on 153
sessions
History
Date
Time
Result
Not Attempted Yet
One of the strategic principles for success in the stock market is to refrain from having knee-jerk reactions to possibly deceptive fluctuations in the market's or a particular stock's performance. Before reinvesting in a rapidly falling stock, analysts and investors will often wait for the passing of one or more small upward bumps, referred to as "dead cat bounces." The term reflects the somewhat crude idea that even a dead cat will bounce if it falls from a great height. Upticks in a plummeting stock can be caused by short selling, triggered sell-offs, or overly optimistic reactions to changes made by the company, such as replacing an unpopular CEO. Such a small, unimpressive rise is usually followed by another drop-off that surpasses the previous low. While almost exclusively related to the stock market, the term has found occasional use in describing other areas of misleading improvement. Poll numbers for a candidate losing ground near an election sometimes make a brief, illusory surge. In sports, losing teams that make midseason coaching changes sometimes experience a mild surge of energy that translates to one or more wins before the team reverts to form.
According to the passage, each of the following is TRUE of a "dead cat bounce" EXCEPT:
(A) It occurs when a stock shows a small improvement followed by a much greater decline in performance.
(B) It only occurs in instances where performance is already showing a rapid decline.
(C) It provides a good opportunity to sell stock at the peak of the "dead cat bounce" before the stock plummets even further.
(D) It is a term that primarily exists to explain a regularly occurring feature of the stock market.
(E) It is capable of occurring multiple times within the same stock's downward collapse before the stock's improvement becomes sustainable.
(A) It occurs when a stock shows a small improvement followed by a much greater decline in performance.
(B) It only occurs in instances where performance is already showing a rapid decline.
(C) It provides a good opportunity to sell stock at the peak of the "dead cat bounce" before the stock plummets even further.
(D) It is a term that primarily exists to explain a regularly occurring feature of the stock market.
(E) It is capable of occurring multiple times within the same stock's downward collapse before the stock's improvement becomes sustainable.
15 May 2025, 22:34
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carcass
We have to find the option where no evidence to support the statement is provided in the passage.
Let's check out each option:
A. It occurs when a stock shows a small improvement followed by a much greater decline in performance. - This is the explanation given for the term "dead cat bounces" and mentioned in this part of the passage: "Such a small, unimpressive rise is usually followed by another drop-off that surpasses the previous low." INCORRECT
B. It only occurs in instances where performance is already showing a rapid decline. - Again mentioned in the passage: "Before reinvesting in a rapidly falling stock, analysts and investors will often wait for the passing of one or more small upward bumps, referred to as 'dead cat bounces'." and the phrase
"Before reinvesting in a rapidly falling stock" tells us that the stock is already falling. INCORRECT
C. It provides a good opportunity to sell stock at the peak of the "dead cat bounce" before the stock plummets even further. - It isn't mentioned anywhere in the passage about the opportunity to sell stock at the peak. CORRECT
D. It is a term that primarily exists to explain a regularly occurring feature of the stock market. - Again mentioned in this line: "investors will often wait for the passing of one or more small upward bumps, referred to as 'dead cat bounces.'" From this line we can infer that this term is generally used by the investors in stock market. INCORRECT
E. It is capable of occurring multiple times within the same stock's downward collapse before the stock's improvement becomes sustainable. - In the statement, " Before reinvesting in a rapidly falling stock, analysts and investors will often wait for the passing of one or more small upward bumps, ", the phrase "Before reinvesting" gives us an idea that the investors don't give up on the stock immediately and the line "wait for the passage of one or more small upward bumps" gives us an indication that the stock might become sustainable. Hence, holds True according to the passage. INCORRECT
18 May 2025, 05:00
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OFFICIAL EXPLANATION QUESTION #1
C
This is a question that asks for the answer choice that is not supported by the passage. That means that the four wrong answers will contain statements you can infer from the text. A solid reading of the text gives you all you need to know about the definition and characteristics of a "dead cat bounce" in order to eliminate choices (A) "usually followed by another drop-off that surpasses the previous low," (B) "before reinvesting in a rapidly falling stock," (D) "occasional use in describing other areas," and (E) "one or more small upward bumps." Choice (C), on the other hand, is out of scope and is therefore the correct answer. Nowhere in the passage does the author discuss the strategies that sellers should use to take advantage of a "dead cat bounce."
C
This is a question that asks for the answer choice that is not supported by the passage. That means that the four wrong answers will contain statements you can infer from the text. A solid reading of the text gives you all you need to know about the definition and characteristics of a "dead cat bounce" in order to eliminate choices (A) "usually followed by another drop-off that surpasses the previous low," (B) "before reinvesting in a rapidly falling stock," (D) "occasional use in describing other areas," and (E) "one or more small upward bumps." Choice (C), on the other hand, is out of scope and is therefore the correct answer. Nowhere in the passage does the author discuss the strategies that sellers should use to take advantage of a "dead cat bounce."
