Question

CAG is a large food wholesaling intermediary. CAG does well financially (and its stock does well also) most of the time. During times of recession, CAG continues to do well. CAG is an example of what type of stock?

A. Defensive

B. Cyclical

C. Rotation

D. Beta

Answer 1

CAG is an example of a A)defensive stock that performs well even during recessions due to the stable demand for food products.

Step-by-step explanation:

CAG, a large food wholesaling intermediary, can be classified as a defensive stock. Defensive stocks are typically less affected by economic downturns or recessions because they provide essential goods or services that people continue to purchase regardless of the economic climate.

Since CAG does well financially even during recessions, it indicates that the demand for food products remains relatively stable in such times, making it a defensive stock. As a result, investors may choose to invest in CAG to mitigate the impact of economic uncertainties.

Other examples of defensive stocks include companies in industries like essential consumer goods, healthcare, and utilities.