Question

Stock in an industry that is very sensitive to economic conditions is more likely to pay ahigher average return than stock in an industry that is relative insensitive to economic conditions.

Answer 1

Significant yields are related with elevated level of hazard and lower chance get lesser returns. Therefore, stock exceptionally touchy to monetary conditions, for example, an automaker are probably going to procure more rates of profitability. On other hand, stock, for example, water organization are inhumane toward monetary factor, thus liable to bring lesser returns. On the off chance that economy is confronting unfavourable circumstance, at that point immediately such stock may acquire average returns.