An automobile company stock can best be characterized as being a ________ stock.

Question

Quizplus · Accepted Answer

Automobile company stocks tend to be cyclical because the industry is heavily influenced by economic conditions and consumer spending. When the economy is doing well and people have more disposable income, they are more likely to buy cars, leading to an increase in demand and stock price. Conversely, during a recession, demand for cars decreases, leading to a decrease in stock price.

An Automobile Company Stock Can Best Be Characterized as Being