- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 6. Industry and Competitive Analysis
- Subject 2. Industry Classification
CFA Practice Question
Which industry is a cyclical industry?
B. Health care
C. Personal care products
A. Airline
B. Health care
C. Personal care products
Correct Answer: A
In good economic times, people have more disposable income and, therefore, they are more willing to take vacations and make use of air travel. Conversely, during bad economic times, people are much more cautious about spending. As a result, they tend to take more conservative vacations closer to home (if they go at all) and avoid expensive air travel.
User Contributed Comments 5
| User | Comment |
|---|---|
| johntan1979 | The same can be said for personal care products. People tend to spend more and willing to pay higher prices on premium products in good economic times. And for air travel, business travels goes on regardless of economic situations. |
| jonan203 | personal care conglomerates like J&J or unilever are hardly cyclical. |
| janglejuic | @johntan1979 not really, I've been using the same shampoo and deodorant regardless of my economic situations |
| Inaganti6 | Toilet paper most non cyclical. 7 billion behinds need wiping regardless of cycles hehe |
| sshetty2 | A large percentage of the world's population does not use toilet paper. Many sites suggest the number is around 70-75%. |