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PRICE: SECTOR ROTATION
Questions
Subjects to Be Covered
Characteristics of early-cycle (liquidity-driven) sectors
Characteristics of late-cycle (earnings-driven) sectors
Sectors that fall between early- and late-cycle leaders
1. True or false: Since the business cycle moves from a deflationary to an inflationary phase, groups sensitive to inflationary conditions have a tendency to lead the market.
A. True
B. False
2. Which of the following statements is true?
A. Inflation-sensitive sectors do well when interest rates are declining.
B. Occasionally, unusual fundamentals for a sector or industry group will override the normal rotational process.
C. Liquidity-driven groups do well when commodity prices are rising sharply.
D. None of the above ...
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