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NEW QUESTION: 1
Darlenc Villanueva provides analytical support for portfolio managers at a small investment management firm, Villanueva's latest report highlights two companies, Company X and Company Y Company X has consistently earned a higher rate of return on assets than their cost of capital, but the stock price is substantially greater than the fair value. Company Y's earnings have been pulled down by the recent economic slowdown, but its stock price has remained stable despite the negative returns on the overall market. Which of the following statements correctly categorizes the two companies?
A. Company X is a growth company and Stock Y is a defensive stock.
B. Stock X is a value stock and Company Y is a defensive company.
C. Stock X is a growth stock and Company Y is a cyclical company.
Answer: A

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