Which of the Following Statements Regarding Defensive Stocks Is True

question 49

Multiple Choice

Which of the following statements regarding defensive stocks is true?

• A) They are often expected to have above-average future growth.
• B) They often have high P/E multiples.
• C) They are expected to be adversely affected by high interest rates.
• D) They often produce necessary items such as food and prescription drugs.

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Definitions:

Misleading Information

False or inaccurate information that leads someone to believe something that is not true, often relevant in consumer protection and securities law.

1933 Act

Refers to the Securities Act of 1933, a U.S. legislation enacted to ensure more transparency in financial statements and to establish laws against misrepresentation and fraudulent activities in the securities markets.

Registration

The process of recording information, typically related to a person, company, or property, in an official or regulatory database.

Sarbanes-Oxley Act

A U.S. law enacted to protect investors by making corporate disclosures more reliable and accurate following the Enron and WorldCom financial scandals.