4.1.2.4. Analysts’ forecasts.There is a huge empirical and theoretical literature
on analysts’ forecasts.I focus on the properties of analysts’ forecasts
and some determinants of these properties.I do not review the research
that examines why analysts forecast earnings, the determinants of the number
of analysts following a firm, and the consequences of analysts’ following on
the properties of security returns.Som e of these issues are examined in
Verrecchia (2001) and Healy and Palepu (2001).I recognize that the issues n
ot examined here also affect the properties of analysts’ forecasts, but
nevertheless I consider those beyond the scope of my review of the capital
markets research.