Which of the Following Is Not a Reason Analyst Recommendations

question 83

Multiple Choice

Which of the following is not a reason analyst recommendations are often more optimistic than warranted by an objective analysis of the facts?

• A) Many analysts fail to grasp the gravity of the problems facing a company.
• B) Sell recommendations generate lower commissions than buy recommendations.
• C) The firms for which analysts work may have lucrative investment banking relationships with the firm.
• D) Analysts are often pressured by their superiors to overlook negative information.

---

Definitions:

Planning

The process of setting goals, developing strategies, and outlining tasks and schedules to achieve those goals.

Operating Synergy

The increased efficiency or added value that results when two companies combine their operations.

Economies of Scales

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Restructuring

The process of restructuring a company's legal, ownership, operational, or other configurations to enhance its profitability or to better suit its current requirements.