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Are Financial Analysts Rational?Stella Valerio is

Are Financial Analysts Rational?Stella Valerio is a financial analyst who follows Olsen Company and other companies in the same industry. You have just done a historical analysis of Stella’s earnings forecasts for Olsen Company and noticed that its earnings have exceeded Stella’s forecasted amount for 27 quarters in a row. You are wondering whether this is just a coincidence, whether Stella is an exceptionally bad forecaster, or whether other factors may be at work here.

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