0.85 Source: B. Groysberg, P. Healy, and C. Chapman, “Buy-Side vs. Sell-side Analysts’ Earnings Forecasts,” Financial Analysts Journal, Vol. 64, No. 4, July/August 2008.

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? Applying the Concepts—Intermediate