Question #6
Reading: Reading 39 Economics and Investment Markets
PDF File: Reading 39 Economics and Investment Markets.pdf
Page: 2
Status: Correct
Correct Answer: B
Question
Spreads for issuers in the consumer cyclical sector are most likely to:
Answer Choices:
A. Be unrelated to business cycle
B. Decrease during economic downturns
C. Increase during economic downturns
Explanation
Spreads on issues from the consumer cyclical sectors tend to rise during economic
downturns and fall during expansions reflecting cyclicality in earnings of the companies in
the sector.