How well do you understand defensive stocks?

5 quick questions · 60 seconds

 

1. 

Which characteristic best defines a defensive stock?

Dependence on rising interest rates

Rapid revenue growth during bull markets

Stable demand regardless of economic conditions

High exposure to consumer discretionary spending

None

2. 

Which sector is most commonly considered defensive?

Energy exploration

Luxury goods

Technology

Consumer staples

None

3. 

Why can a defensive stock still be labeled “High-Risk”?

Because it operates in a non-essential industry

Because defensive stocks are always volatile

Because defensive stocks never pay dividends

Because regulation, debt, or restructuring can increase uncertainty

None

4. 

How do defensive stocks typically behave during market downturns?

They fall more than growth stocks

They remain completely flat

They often decline less than the overall market

They usually rise sharply

None

5. 

What is the primary role of defensive stocks in a diversified portfolio?

Replacing bonds entirely

Reducing volatility and smoothing returns

Timing market tops and bottoms

Maximizing short-term gains

None

1 out of 5

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