Canadian Securities Course (CSC) Level 2 Practice Exam

What type of growth is associated with Mature Industries?

1. Slower/stable growth

2. Continually developing

3. Stop in growth or declining

4. Unprofitable at first

The correct answer is: Slower/stable growth

Mature industries are typically characterized by a phase of slower and stable growth. This is because these industries have already experienced significant expansion and market penetration, leading to a situation where the potential for rapid growth diminishes. Growth in mature industries often stabilizes as competition intensifies and the market becomes saturated with existing products and services. Companies within these industries may focus on efficiency, maintaining their market share, and maximizing profits rather than pursuing aggressive growth strategies. The other options reflect different stages of the industry lifecycle. Continually developing growth is more associated with emerging or growth industries, where innovation and new entrants drive rapid expansion. A stop in growth or declining would signify a different phase, typically seen with industries that have passed their maturity stage and face decreasing demand. Lastly, being unprofitable at first usually relates to startups or early-stage companies that are still establishing their presence in the market, which does not align with the nature of mature industries.