Which of the Following Is True Regarding Earnings Forecasts Made

question 49

Multiple Choice

Which of the following is true regarding earnings forecasts made by analysts versus forecasts made by statistical models?

• A)The evidence tends to support analysts' forecasts in terms of accuracy over statistical models.
• B)The evidence tends to support statistical models' forecasts in terms of accuracy over statistical models.
• C)The evidence tends to support both types of forecasts equally.
• D)The evidence does not support either type of forecast in terms of accuracy.

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Definitions:

Geometric Average

The geometric average is a method of calculating the mean that mitigates the impact of extreme values in a data set, commonly used in calculating investment returns.

Historical Record

Documentation or an account of past events, actions, or operations, serving as evidence or information about previous occurrences.

Financial Markets

Platforms where buyers and sellers trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand.

Real Rate Of Return

The annual percentage of profit or loss on an investment adjusted for inflation.