Rule 6 of 7 in this unit1.3.2

1.3.2 Business Economic Factors

SIE outline 1.3.2

Exchange Rates Move Both Directions

A stronger currency: cheaper imports, pricier exports. A weaker one: the reverse. NOT a one-directional effect.

The method for this kind of question
  1. Predicts or confirms: never both

Now answer

1 question 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 contraction deepens. Which group of shares is described as defensive?

How sure are you?

Correct: B. People keep eating and keep the lights on in every phase of the cycle, so those earnings hold up.
A. A luxury car is the archetypal postponable purchase, a cyclical sector.
C. Construction machinery is bought out of capital budgets, cut early in a downturn.
D. Air travel and resort stays are discretionary spending that falls with income.

Unit: SIE outline 1.3.2

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