Which of the following describes a bear market?

A bear market is characterized by a significant decline in stock prices, typically defined as a drop of 20% or more from recent highs. This definition captures the essence of investor sentiment during bear markets, where prevailing pessimism leads to widespread selling and lower asset values.

The other options do not accurately reflect what a bear market entails. A scenario where there are no significant changes in stock prices represents a stable or sideway market rather than a bear market. Consistent growth in stock prices describes a bull market, where investor confidence leads to increasing values. Lastly, a market that is recovering from a downturn reflects a transitional phase to stability or growth rather than a bear market, which is explicitly marked by declining prices. Thus, the correct answer identifies the conditions that define a bear market's broader implications on the investment landscape.