How is a "bull market" defined?

A bull market is characterized by rising prices and investor optimism about the future performance of the market. This condition typically arises when there is a sustained increase of 20% or more in stock prices, and it encourages buying and investment as consumers feel confident in economic growth and corporate earnings. Investor sentiment plays a significant role in a bull market, as positive news, strong economic indicators, and favorable corporate earnings reports can further enhance optimism, leading to increased trading activity and higher prices.

In contrast, the other choices describe different market phenomena that do not directly relate to the characteristics of a bull market. Increased bankruptcies reflect economic distress, high volatility indicates uncertainty and erratic price movements rather than sustained growth, and declining interest rates can have various effects on the market but do not solely define a bull market.