Which Sector Has a Low Sensitivity to the Business Cycle

question 28

Multiple Choice

Which sector has a low sensitivity to the business cycle?

• A) defensive
• B) offensive
• C) lagging
• D) cyclical
• E) leading

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Definitions:

Acid-Test Ratio

A stringent indicator of a company's liquidity, calculated by dividing liquid assets excluding inventories by current liabilities.

Company

A business organization founded by a group of individuals dedicated to pursuing and administering a commercial or industrial venture.

Acid-Test Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities with quick assets (cash, marketable securities, and accounts receivable).

Company

A business entity established by a collection of people to conduct and manage a commercial venture.