________ stocks tend to fare better when the economy is doing worse and vice versa

A) Blue chip
B) Income
C) Penny
D) Cyclical
E) Defensive

Answer: E
Explanation: Defensive stocks are stocks of companies that tend to fare better when the economy is doing worse and vice versa. For example, new car sales decline in a falling economy but car repair businesses usually increase revenue as people try to hang onto their automobiles longer.