Statistics for Business and Economics, Student Value Edition (13th Edition)
13th Edition
ISBN: 9780134456997
Author: James T. McClave, P. George Benson, Terry Sincich
Publisher: PEARSON
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Textbook Question
Chapter 8.2, Problem 8.17ACB
Buy-side vs. sell-side analysts’ earnings forecasts. Refer to the Financial Analysts Journal (Jul./Aug. 2008) study of financial analysts’ forecast earnings. Exercise 2.86 (p. 88). Recall that data were collected on 3,526 forecasts made by buy-side analysts and 58,562 forecasts made by sell-side analysts, and the relative absolute forecast error was determined for each. The mean and standard deviation of forecast errors for both types of analysts are given in the table.
| Buy-Side Analysts | Sell-Side Analysts | |
| 3.526 | 58,562 | |
| Mean | 0.85 | −0.05 |
| Standard Deviation | 1.93 | 0.85 |
- a. Construct a 95% confidence interval for the difference between the mean forecast error of buy-side analysts and the mean forecast error of sell-side analysts.
- b. Based on the interval, part a, which type of analysis has the greater mean forecast error? Explain.
- c. What assumptions about the underlying populations of forecast errors (if any) are necessary for the validity of the inference, part b?
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Chapter 8 Solutions
Statistics for Business and Economics, Student Value Edition (13th Edition)
Ch. 8.2 - The purpose of this exercise is to compare the...Ch. 8.2 - Prob. 8.2LMCh. 8.2 - In order to compare the means of two populations,...Ch. 8.2 - Prob. 8.4LMCh. 8.2 - Prob. 8.5LMCh. 8.2 - Prob. 8.6LMCh. 8.2 - Independent random samples from normal populations...Ch. 8.2 - Two independent random samples nave been...Ch. 8.2 - Independent random samples of n1 = 233 and n2 =...Ch. 8.2 - Independent random samples from approximately...
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