Which of the Following Statements Regarding Defensive Stocks Is True

question 49

Multiple Choice

Which of the following statements regarding defensive stocks is true?

• A) They are often expected to have above-average future growth.
• B) They often have high P/E multiples.
• C) They are expected to be adversely affected by high interest rates.
• D) They often produce necessary items such as food and prescription drugs.

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Definitions:

Earnings Per Share

Earnings Per Share (EPS) measures the portion of a company's profit allocated to each outstanding share, indicating a company’s financial performance.

Owners' Equity

The residual interest in the assets of a company after deducting its liabilities, representing the ownership stake held by shareholders.

Earnings Per Share

A financial ratio that calculates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.

Financial Performance

An assessment of how well a company can use assets from its primary mode of business and generate revenues.