Which of the following characterizes a defensive stock?
A)The company grows more rapidly in sales and earnings than the overall economy
B)The company is less affected by cyclical business conditions
C)The company grows at average or below-average rates
D)Both a and b
E)Both b and c

Question

Quizplus · Accepted Answer

Defensive stocks are known for being less affected by cyclical business conditions, which is characteristic of choice E. They are also known for having average or below average growth rates, which is also characteristic of choice E. Choice A is more characteristic of a growth stock, which is the opposite of a defensive stock. Choice B only covers one aspect of defensive stocks and does not address their growth rates.

Which of the Following Characterizes a Defensive Stock