1.1)Critically evaluate the following statement made by a
quantitative buy-side analyst: “It is not worth the time to develop
detailed fundamentals-based forecasts of sales growth and profit
margins to make earnings projections, or cash flow components to
make projections of free cash flow. One can be almost as accurate,
at virtually no cost, using the random walk model to forecast
earnings and free cash flow.”
1.2)To forecast earnings and cash flows beyond three years, a
sell-side analyst assumes that sales...