Question

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⿻‌‌‌‌‌‌ Q U E S T I O N ⿻
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1. Which of the following is a characteristic of a defensive sector?
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A. Rapid growth
B. Low dividend yield
C. Low sensitivity to the business cycle
D. High payout ratio
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Answer 1

The characteristic of a defensive sector among the options provided is:

C. Low sensitivity to the business cycle.

Step-by-step explanation:

Defensive sectors are typically composed of industries that are less affected by changes in the overall economy and tend to perform relatively well during economic downturns. These sectors include essential goods and services that people continue to demand regardless of the economic conditions, such as utilities, healthcare, consumer staples, and telecommunications. They are considered defensive because their performance tends to be more stable and less volatile compared to sectors that are highly sensitive to economic fluctuations.

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