During a Recession

question 32

Multiple Choice

During a recession,

• A) financial stock rise on expectations of increases in loan demand, housing constructions and security offerings.
• B) consumer durable stocks rise on expectations of rising consumer confidence and personal income.
• C) capital goods stocks rise on expectation of increases in business capital spending.
• D) basic materials stocks rise on expectation of rising profit margins.
• E) consumer staple stocks rise on expectations that consumers will continue to spend on necessities.

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Definitions:

Angel

A wealthy person who funds a new business, typically in return for convertible debt or a share in the company's equity.

Pre-money Valuation

The value of a company as estimated before the injection of new capital or investments.

Post-money Valuation

Refers to a company's valuation after external financing and/or capital injections are added to its balance sheet.

Outside Investment

Funds acquired from external sources, such as venture capitalists or angel investors, to finance the operations or growth of a business.