Which of the following is not a reason analyst recommendations are often more optimistic than warranted by an objective analysis of the facts?
A) Many analysts fail to grasp the gravity of the problems facing a company.
B) Sell recommendations generate lower commissions than buy recommendations.
C) The firms for which analysts work may have lucrative investment banking relationships with the firm.
D) Analysts are often pressured by their superiors to overlook negative information.

Question

Quizplus · Accepted Answer

Analyst recommendations are often more optimistic than warranted by facts. Many analysts failed to grasp the gravity of the problems surrounding Lehman Brothers and Countrywide until the very end. Most analysts work for firms that have investment banking relationships with the companies they follow. Otherwise competent analysts may be pressured to overlook negative information or tone down their criticism.

Which of the Following Is Not a Reason Analyst Recommendations