Which of the Following Characterizes a Defensive Stock

question 2

Multiple Choice

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

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Definitions:

Equal Interest

A situation where all parties or stakeholders hold an identical percentage or stake in an agreement, asset, or entity, ensuring a fair distribution of rights and obligations.

Unanimous Consent

Unanimous consent refers to an agreement or decision made with the approval of all parties involved, often used in corporate governance contexts to expedite decisions without a formal vote.

AASB 11

An Australian accounting standard that addresses the accounting for interests in joint arrangements, specifying how an entity should report its interests.

Joint Arrangement

A contractual arrangement in which the parties involved have joint control over the decision making in relation to the joint arrangement.