Two Statements, Two Jobs

2 questions on this screen, from this outline item's own pool, so some will test a rule you met earlier in the unit. Pick an answer, say how sure you are, then reveal. Being sure and wrong is the most useful thing that can happen here, and the coach treats it that way.

Question 1Exam level

A homebuilder's stock rises sharply during expansions and falls sharply during contractions, tracking consumer confidence closely. What kind of stock is that, on the outline's own classification?

A. A cyclical stock B. A defensive stock C. A growth stock D. A lagging indicator

How sure are you?

Sure Fairly sure Guessing

Correct: A. Rising and falling with the business cycle, tied to consumer confidence, is the definition of a cyclical stock.

B. A defensive stock holds steady regardless of the cycle, the opposite behavior.

C. A growth stock is valued for future earnings and reinvestment, not cycle sensitivity specifically.

D. A lagging indicator is an economic data series, not a stock category.

Unit: SIE outline 1.3.2

Question 2Harder

A report reads: "As of December 31, the company held total assets of $80 million." Which statement is this?

A. The income statement B. The balance sheet C. The statement of cash flows D. It cannot be determined from a single sentence

How sure are you?

Sure Fairly sure Guessing

Correct: B. "As of" a single date, reporting assets, is the balance sheet's own language, a snapshot at one moment.

A. The income statement covers a period and reports revenue and expenses, not "as of" a date.

C. The statement of cash flows tracks cash movement over a period, not total assets at a moment.

D. The phrase "as of" plus "total assets" is exactly the balance sheet's own signature language.

Unit: SIE outline 1.3.2

Now answer