Question: A financial analyst claims that I dont bother to develop detailed forecasts of sales growth or profit margins to make earnings projections. I can be

A financial analyst claims that “I don’t bother to develop detailed forecasts of sales growth or profit margins 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 this forecast strategy? Explain.

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