What is a bull market?

A bull market is defined as a market condition characterized by rising prices, typically marked by an increase of 20% or more in stock prices from recent lows. This phenomenon indicates strong investor confidence and expectations that the upward trend will continue.

During a bull market, investors are more inclined to buy securities, believing that prices will continue to appreciate. Economic indicators such as low unemployment, rising GDP, and increasing corporate profits often accompany bull markets, reinforcing the growth in asset prices.

The other options do not accurately reflect the definition of a bull market. Stagnant prices suggest a lack of movement in either direction, falling prices indicate a bear market, and low trading volumes relate more to market activity rather than price trends. Therefore, the characterization of rising prices with a benchmark of 20% or more gain clearly defines the essence of a bull market.