vanced Topics in Corp... B: September 9 Case 1: Warren Buffet 2 This week (Week 3) let's keep reading Warren E. Buffe case and answer the following questions about Buffet investment philosophy: Buffett's Investment Philosophy Buffett's investment philosophy reads mostly like a summary of the theory of modern finance. As the subheadings in the case indicate, the elements of the philosophy are as follows: 1. Economic reality, not accounting reality 2. Account for the cost of the lost opportunity 3. Focus on the time value of money 4. Focus on wealth creation 5. Invest on the basis of information and analysis 6. The alignment of agents and owners is beneficial to firm value 1. What is CAPM (Capital Asset Pricing Model)? 2. Buffett strongly disagrees, however, with three othe elements of modern finance. What are these three elements of modern finance that Buffet strongly disagrees? Explain