Stocks Whose Prices Are Expected to Remain Stable, or Even

question 105

Multiple Choice

Stocks whose prices are expected to remain stable, or even prosper, when economic activity is slowing down are known as

• A) defensive stocks.
• B) cyclical stocks.
• C) growth stocks.
• D) speculative stocks.

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Definitions:

Incremental Analysis

The examination of the additional costs and benefits of certain decisions, focusing on the changes that would occur from choosing one alternative over another.

Payback Method

A capital budgeting technique that calculates the time required to recoup the cost of an investment.

Accounting Rate of Return

The rate of return anticipated on an investment in terms of accounting income, typically used to evaluate the profitability of a project or investment.

Financial Accounting Statements

Formal records of the financial activities and position of a business, person, or other entity, typically including the balance sheet, income statement, and statement of cash flows.