Question

Greg Jewell read about several companies that were performing relatively well despite the current recession. Stocks like these, that in some cases actually perform better during downturns in the economy, are called ________ stocks
A) cyclical

B) speculative

C) defensive

D) growth

E) seasonal

Answer 1

Answer:

C) defensive

Explanation:

Defensive stocks are stocks that generally perform well during economic recessions. In other words, their price is not related to the market tendency. Even if the market goes down, their price remains stable. Generally companies that sell products with a constant demand are considered defensive stocks, e.g. Costco, Target, Walmart, utilities (all, electric, gas, water), etc.