SIE Exam Practice Question 985

Question: 985

Which of the following is/are correct regarding cyclical stocks?

(1) When the economy is growing, demand usually strengthens and cyclical companies are able to make large profits.

(2) When the economy is declining, cyclical companies are hurt by decreases in demand and are less profitable.

A. (1) only

B. (2) only

C. Both (1) and (2) are correct.

D. Neither (1) or (2) are correct.