Two major types of financial analysts

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There are two major types of financial analysts: buy-side and sell-side. Buy-side analystswork for investment firms and make share recommendations that are available only to themanagement of funds within that firm. Sell-side analysts work for brokerage firms and makerecommendations that are used to sell shares to the brokerage firms' clients, which include individual investors and managers of investment funds

.a. What would be the differences in tasks and motivations of these two types of analysts?

b. Many market participants believe that sell-side analysts are too optimistic in their recommendations to buy shares, and too slow to recommend sells. What factors might explain this bias?

c. On the other hand, some researchers have found that sell-side analysts can be pessimistic in their forecasts, particularly early in the forecast period, in order to gain the favour of managers. Why might this occur?

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Reference no: EM13967909

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