-Which of the following is not, historically, typical of the attitude of an anal

Question

-Which of the following is not, historically, typical of the attitude of an analyst where business trends are upward (or positive)?

Tendency to apply higher multiples on past earnings and cash flows.

Build in speculative components to price target based upon future expected improvement.

Neglect to differentiation between value and speculation.

Fully account for possibility that forecasts are too optimistic.

Tendency to apply higher multiples on past earnings and cash flows.

Build in speculative components to price target based upon future expected improvement.

Neglect to differentiation between value and speculation.

Fully account for possibility that forecasts are too optimistic.

Explanation / Answer

Option d is correct. Fully account for possibility that forecasts are too optimistic.
Usually analyst don't try to find out the possibility of optimistic forecasts
When business trend are positive analyses they tend to be biased toward higher multiples, they speculate and don’t analyses the actual value and rather go ahead with speculative value.

Best of Luck. God Bless

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