Role of cyclical and defensive stocks in S’s portfolio. Introduction: Cyclical stocks are equity securities whose share price gets affected by the rise and fall in the overall economy. Defensive stocks are those securities which provide regular dividend and stable earnings to their shareholders and their profit is not affected by the ups and downs of the economy. Portfolio is a group of financial assets including investment in shares, bonds and highly liquid debt instruments having maturity period of less than three months held by an individual or an organization.

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Chapter 12, Problem 2DC1

Summary Introduction

To explain:

Role of cyclical and defensive stocks in S’s portfolio.

Introduction:

Cyclical stocks are equity securities whose share price gets affected by the rise and fall in the overall economy.

Defensive stocks are those securities which provide regular dividend and stable earnings to their shareholders and their profit is not affected by the ups and downs of the economy.

Portfolio is a group of financial assets including investment in shares, bonds and highly liquid debt instruments having maturity period of less than three months held by an individual or an organization.

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