Which of the following statements about analysts' earnings forecasts is correct? Analysts' long-term forecasts tend to be too:
A) high, whereas their near-term forecasts tend to be too low.
B) high, and their near-term forecasts also tend to be too high.
C) low, whereas their near-term forecasts tend to be too high.
D) low, and their near-term forecasts also tend to be too low.

Question

Quizplus · Accepted Answer

Analysts' long-term forecasts tend to be too high because they do not fully account for the uncertainty of the future. Their near-term forecasts also tend to be too high because they are often based on the assumption that current trends will continue, which is not always the case.

Which of the Following Statements About Analysts' Earnings Forecasts Is