An analyst claims, It is not worth my time to develop detailed forecasts of revenue growth, profit
Question:
An analyst claims, “It is not worth my time to develop detailed forecasts of revenue growth, profit margins, etcetera, to make earnings projections.
I can be almost as accurate, at virtually no cost, using the random walk model to forecast earnings.” What is the random walk model?
Do you agree or disagree with the analyst’s forecast strategy? Why or why not?
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Step by Step Answer:
The random walk model is a forecasting approach that assumes future values of a variable such as earnings are equal to the most recent observed value ...View the full answer
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Related Book For 
Business Analysis And Valuation
ISBN: 978-1473758421
5th Edition
Authors: Erik Peek, Paul Healy, Krishna Palepu
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