Defensive stocks are typically issued by what type of companies?

Defensive stocks are typically issued by what type of companies?

• A. Companies with highly volatile earnings
• B. Recession-resistant companies
• C. Companies focused on growth
• D. Defensively priced companies

Answer: (B)

Defensive stocks are generally issued by recession-resistant companies, which tend to maintain stable earnings and dividends regardless of the economic environment. These companies typically operate in sectors that provide essential goods and services, such as utilities, healthcare, and consumer staples, which people continue to need even during economic downturns. Investors often turn to defensive stocks as a way to preserve capital in uncertain times, as these stocks usually experience less price volatility compared to more growth-oriented or cyclical stocks. The stability offered by recession-resistant companies makes them a key focus for those seeking to minimize risk in their investment portfolios, especially in periods of economic recession when other sectors may struggle. While other options refer to concepts related to stock performance (like volatility or growth focus), they do not encapsulate the core attribute of defensive stocks, which is their resilience during economic hardship.

Defensive stocks are generally issued by recession-resistant companies, which tend to maintain stable earnings and dividends regardless of the economic environment. These companies typically operate in sectors that provide essential goods and services, such as utilities, healthcare, and consumer staples, which people continue to need even during economic downturns.

Investors often turn to defensive stocks as a way to preserve capital in uncertain times, as these stocks usually experience less price volatility compared to more growth-oriented or cyclical stocks. The stability offered by recession-resistant companies makes them a key focus for those seeking to minimize risk in their investment portfolios, especially in periods of economic recession when other sectors may struggle.

While other options refer to concepts related to stock performance (like volatility or growth focus), they do not encapsulate the core attribute of defensive stocks, which is their resilience during economic hardship.