Question

Problem # 1: Refer to the stock price forecast table provided and any other resource material you deem necessary to address the following:

• explain how the forecasters might have utilized the historical data for the stock price to forecast future stock prices and the methodology for forecasting that the forecaster might have used.
• What assumptions did the forecaster use? What might be some of the rational for making the assumptions? How would different assumptions affect the forecast?
• If you were advising investors regarding the organization's stocks, what would you tell them? Comment on when, and how much (if any) investment should be done, the return they can expect, time frames, and possible risks.

Answer 1

Answer :

There are various factors which are taken into consideration before forecasting as they are as follows-

1. GDP growth of the country plays a major role in Index. As the GDP goes on increasing Index of the particular country goes on increasing.

2.Oil prices affect the entire world.

3. Is country an Agricultural, manufacturer or service dominated?

4. As you can the history of any index, it will always have a bubble and the bust as well as the index is always on the increasing side.

5. Some of these assumptions help analysts to choose the perfect scrips.

6. Financial statements of different companies are taken into account before investing.

7. Different financial ratios are considered.

So in all, Technical and financial indicators help analysts to make a decision of investing.