Assume your firm produces a good which has high sales when the economy is expanding and lowsales during a recession. Your risk will be higher if you invest in another product which iscountercyclical.

Question

Quizplus · Accepted Answer

Investing in a countercyclical product, which performs well during recessions, can actually reduce overall risk by balancing the firm's portfolio, as it offsets the cyclical nature of the original product.

Assume Your Firm Produces a Good Which Has High Sales