A(n)________ stock's price is greatly affected by the state of the economy because the company makes a product that can have highly variable demand.

Question

Quizplus · Accepted Answer

Cyclical stocks are tied to the state of the economy and their prices are greatly affected by changes in business cycles. They tend to perform well during times of economic expansion and struggle during recessions. The fact that the company makes a product that can have highly variable demand further supports the classification of the stock as cyclical.

A(n)________ Stock's Price Is Greatly Affected by the State of the Economy