A defensive business is characterized by which of the following?

A defensive business is characterized by little short-term finance and low risk because it typically prioritizes stability over aggressive growth. This type of business often operates in industries that are less sensitive to economic cycles, such as utilities or consumer staples, leading to a more conservative financial strategy. By maintaining a low level of short-term finance, defensive businesses effectively minimize their exposure to sudden financial downturns and volatility.

This focus on risk aversion enables defensive businesses to weather economic uncertainties better than those that employ a more aggressive financial approach. Investors usually gravitate towards defensive businesses during adverse economic conditions, as they provide steadier returns and fewer fluctuations. These characteristics contribute to a perception of safety among stakeholders, making them a preferred investment choice in uncertain times.

The other choices represent different business characteristics that do not align with the nature of a defensive business, such as high-risk strategies or a significant focus on aggressive growth, which is contrary to the defensive approach.