- CFA Exams
- CFA Level I Exam
- Study Session 13. Equity Investments (2)
- Reading 40. Introduction to Industry and Company Analysis
- Subject 2. Approaches to Identifying Similar Companies
CFA Practice Question
Which of the following industries is (are) most likely to be regarded as cyclical?
II. Information technology
III. Telephone
IV. Auto
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 |