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Descriptive Statistics - Financial

• Warren Buffett is the Chairman and CEO of Berkshire Hathaway. Even though the firm has approximately 200,000 employees, Mr. Buffett has a staff of under twenty at the Omaha corporate headquarters. Do you believe that more companies should be run in this matter? Why or why not?

• Additionally, Warren Buffett typically does not invest in international companies. However, other investors do invest internationally. What are the advantages and disadvantages of international investing? I look forward to your response.

• The shareholders are the owners of the company. They elect the members of the Board of Directors. The members of the Board of Directors select the officers of the company. The shareholders are trying to earn a return on their investment. Is it important for officers of a company to also be shareholders in that company? Why or why not?

• Do you think that stock options for managers more correctly align the interests of shareholders and managers? Why or why not?

• Please calculate the correlation coefficient of returns between an international stock and a U.S. stock over the past year. You get to choose the stocks.

• Can there be a conflict between bondholders and stockholders in a firm? For example, couldn't stockholders benefit from a relatively high debt ratio?

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• Warren Buffett is the Chairman and CEO of Berkshire Hathaway. Even though the firm has approximately 200,000 employees, Mr. Buffett has a staff of under twenty at the Omaha corporate headquarters. Do you believe that more companies should be run in this matter? Why or why not?
Companies appear to have adopted a new perspective on the role of their corporate headquarters. Instead of considering it a cost factor that can be easily slashed, companies seem to have recognized the need for a stronger corporate hand.
On the one hand, they want to reduce corporate overheads, bureaucracy, and harmful interferences in their business divisions.
On the other hand, they also want to develop and maintain the corporate capabilities that allow their company to compete with its rivals. While resolving this dilemma has always been an important task, finding the right balance is more challenging than ever. Moreover, companies are often inclined to follow trends, which results in a swing between centralization and decentralization.
Therefore, I belive that having a small headquarter staff it is a benefit for a large company, because in this way the employees could make their own decisions and the work they do it is more fluen and flexible.
• Additionally, Warren Buffett typically does not invest in international companies. However, other investors do invest internationally. What are the advantages and disadvantages of international investing? I look forward to your response.
There are different ways you can invest internationally: through mutual funds, American Depositary Receipts, exchange-traded funds, U.S.-traded foreign stocks, or direct investments in foreign markets.
Sudden changes in market value are only one important consideration in international investing. Changes in foreign currency exchange rates will affect all international investments, and there are other special risks you should consider before deciding whether to invest. The degree of risk may vary, depending on the type of investment and the market. For example, international mutual funds may be less risky than direct investments in foreign markets, and investing in developed economies may avoid some of the risks of investing in emerging markets.
By including exposure to both domestic and ...

Solution Summary

The solution answers a few descriptive statistics financially related questions.

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