Recent research has shown that many financial analysts are often inaccurate when forecasting company profits. Typically they tend to be over optimistic about prospects, although some can be very pessimistic and significantly underestimate actual results. Much depends on the individual analyst’s general approach, with some being bolder than others. It has been shown, however, that more accurate forecast could be produced if analysts applied the average company profits increase across the whole economy to each company proportion to its market share
Many analysts could improve the accuracy of their forecast
Correct answer: A
Most analysts are accurate when forecasting company profits
Correct answer: B
How bold an analyst is in forecasting depends on his or her general level of optimism
Current marketing strategy has shifted attention away from how consumers chose brands towards how they use products. Expanding the use of a product can have an enormous impact on sales. Inducing existing customers to use a product in a new context is also more cost effective than either soliciting non-users to try the product, or luring people away from the competition
In the future, marketing strategy will depend considerably on how products are being used by consumers
Correct answer: C
Canvassing new users to try a product is more cost effective than encouraging wider use of a product by existing customers.