| Session 14: Equity Analysis and Valuation Reading 59: Introduction to Industry and Company Analysis
 
 
 LOS b: Compare and contrast the methods by which companies can be grouped, current industry classification systems, and classify a company, given a description of its activities and the classification system.     Auto manufacturers and home builders would most likely be grouped together in an industry classification system based on: 
 
 
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| A) | sensitivity to business cycles. |  |  
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| B) | type of business activity. |  |  
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Auto manufacturing and home building are both cyclical industries. An industry classification system based on business cycle sensitivity would be the most likely to group firms from these industries together. |