A Stock Issued by a Corporation That Has the Potential

question 61

Multiple Choice

A stock issued by a corporation that has the potential of earning above-average profits when compared to other firms in the economy is called a(n) ________ stock.

• A)defensive
• B)cyclical
• C)growth
• D)income
• E)blue chip

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Definitions:

Elastic

Describes a situation where the demand for a product significantly changes in response to changes in its price.

Absolute Value

A numerical value regardless of its sign, often represented as the distance of a number from zero on the numerical scale.

Price Inelastic

Describes a situation where the demand for a product does not significantly change with a price increase or decrease.

Total Revenue

The total amount of money a firm receives by selling goods or services, calculated as the unit price times the quantity sold.