Analyze the financial condition of firms

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Reference no: EM131305222

In one of his annual letters to shareholders of Berkshire Hathaway, Warren Buffett wrote that "even experienced investors and analysts encounter major problems in analyzing the financial condition of firms that are heavily involved with derivatives contracts."

Why might it be difficult for investors to analyze the financial condition of firms that are buying and selling large numbers of derivatives? Does it matter what type of derivatives the firms are buying and selling?

Reference no: EM131305222

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