Information or Noise, A Study on the Accuracy of Analysts’ Forecasts in Brazil

11 Pages Posted: 18 Feb 2015

See all articles by Jose L. B. Fernandes

Jose L. B. Fernandes

Universidade de Brasília

Meirelly Dayara Goulart

Catholic University of Brazil (UCB)

Alberto S. Matsumoto

Universidade Católica de Brasília; Government of the Federative Republic of Brazil - Central Bank of Brazil

Paulo César Chagas

Catholic University of Brazil (UCB)

Date Written: February 16, 2015

Abstract

This paper evaluates the accuracy of financial analysts’ forecasts. These predictions are very important since they are used by investors and administrators during the decision making process. We address the quality of the forecasts by comparing them to the actual numbers, using the root mean squared error (RMSE) as the accuracy measure. The data used in this research is provided by the Central Bank of Brazil in the weekly survey with the market analysts: Focus Report. Our results support the hypothesis that analysts’ forecasts are less accurate the further they are away from the date of release of the actual numbers and there is some level of information in some classes of economic indices forecasts which could be used by investors.

Keywords: Forecasting, Economic indicators, Financial analysts.

JEL Classification: G14

Suggested Citation

Fernandes, Jose Luiz Barros and Goulart, Meirelly Dayara and Matsumoto, Alberto S. and Chagas, Paulo César, Information or Noise, A Study on the Accuracy of Analysts’ Forecasts in Brazil (February 16, 2015). Available at SSRN: https://ssrn.com/abstract=2565987 or http://dx.doi.org/10.2139/ssrn.2565987

Jose Luiz Barros Fernandes (Contact Author)

Universidade de Brasília ( email )

Campus Universitário Darcy Ribeiro
Brasília, Distrito Federal 70910-900
Brazil

Meirelly Dayara Goulart

Catholic University of Brazil (UCB) ( email )

SGAN 916, Modulo B, Asa Norte
Brasília, DF 70790-160
Brazil

Alberto S. Matsumoto

Universidade Católica de Brasília ( email )

SGAN 916, módulo B, Asa Norte
Brasília, Brasília 70790-160
Brazil
556181618192 (Phone)

Government of the Federative Republic of Brazil - Central Bank of Brazil ( email )

P.O. Box 08670
SBS Quadra 3 Bloco B - Edificio-Sede
Brasilia, Distr. Federal 70074-900
Brazil

Paulo César Chagas

Catholic University of Brazil (UCB) ( email )

SGAN 916, Modulo B, Asa Norte
Brasília, DF 70790-160
Brazil

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