CFA Practice Question

There are 191 practice questions for this study session.

CFA Practice Question

Which of the following industries is (are) most likely to be regarded as cyclical?

I. Beer
II. Information technology
III. Telephone
IV. Auto
A. I and IV
B. II and III
C. IV only

User Contributed Comments 10

User Comment
steveumd Not IT??
jimcrock IT is assumed to be growth, I guess.
danlan2 Beer and telephone industries are defensive.
anju investment in IT cannot be deferred merely because the economy is in recession, the criterial for deciding cyclical industry..
Yurik74 Do not agree. Studies show that beer consumption is higher during summer
Yurik74 Stupid me. Cyclical in different sense. Objection omitted
pooji I believe they are referring to cyclical as the relationship btw the industry and the state of the economy...

that being said, beer and wine consumption is cyclical. it is a discretionary spend and if we are in a recession, customers will be purchasing less beer and wine...

beer would be cyclical if everyone was an alcoholic.
chunkychen Actually beer sales tend to be higher during economic downturns--perhaps people like to drink more in hard times.
dream007 trick to this question was to list the obvious answer which was IV. that leaves only a and c as possible answers. since we know beer is definitely not cyclical, that eliminates A, thus leaving only C as the possible choice.
bidisha Don't confuse cyclical with seasonal
You need to log in first to add your comment.