Question
An investment management firm is considering hiring an analyst. The firm wants to assess how well the analyst does at forecasting quarterly earnings per share
An investment management firm is considering hiring an analyst. The firm wants to assess how well the analyst does at forecasting quarterly earnings per share (EPS). To make the assessment, 44 quarterly EPS estimates by the analyst are examined and the average forecast error (predicted EPS value actual EPS achieved) and its standard deviation are found to be 0.07 and 0.12, respectively. From the firm's perspective, the best outcome is for the analyst to achieve a mean forecasting error of zero. With as the population mean forecasting error, the null hypothesis (H0) to test the analyst's forecasting quality is:
Group of answer choices
A. H0: 0.
B. H0: > 0.
C. H0: = 0.
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