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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. What information did Jon Gutfruend withhold?
(a) Salomon bond revenues.
(b) that a Salomon trader made a false bid.
(c) Salomon trading strategy.
(d) the level of Salomon bonuses.

2. Which of the following was not one of the permanent three in Berkshire's portfolio?
(a) GEICO.
(b) Washington Post.
(c) Cap Cities.
(d) IBM.

3. Cap Cities would use the money from Berkshire to:
(a) modernize.
(b) invest in the satellite business.
(c) diversify.
(d) buy ABC.

4. By the 1990s, Buffett was worth:
(a) $620 million.
(b) $1 billion.
(c) $250 million.
(d) $500 million.

5. Buffett's role in protecting certain CEOs from takeovers was referred to as:
(a) redmail.
(b) whitemail.
(c) blackmail.
(d) greenmail.

6. Buffett's theory of trading is based on:
(a) Randon Walk.
(b) Accurate price forecasts.
(c) Efficient Market Theory.
(d) Graham and Dodds.

7. The head of Salomon was:
(a) Gedale Horowitz.
(b) Henry Kaufman.
(c) Jon Gutfreund.
(d) Paul Mozto.

8. What did Susie unexpectedly do at the age of forty-five?
(a) tried to commit suicide.
(b) moved out of Buffett's house and into a San Francisco apartment.
(c) filed for divorce.
(d) returned to school.

9. Buffett differed from other CEOs in that he:
(a) he did most of his work at home.
(b) he hired a variety of secretaries.
(c) he did not have an office.
(d) did not have a structured appointments schedule.

10. When Buffett is described as a gorilla, it refers to:
(a) his protecting CEOs from a takeover.
(b) none of the above.
(c) his gruff manner.
(d) his manner of negotiation.

11. Buffett appeared on:
(a) What's My Line.
(b) This is our Life.
(c) Johnny Carson.
(d) Lifestyles of the Rich and Famous.

12. The settlement of the public and private cases cost Salomon:
(a) $400 million.
(b) $490 million.
(c) $45 million.
(d) $125 million.

13. Who handled Berkshire's investments:
(a) Buffett and Bill Scott.
(b) Charlie Munger.
(c) Buffett alone.
(d) his staff of fourteen traders.

14. Buffett's views on hostile takeovers included all but:
(a) they greatly benefited society.
(b) they were no value creating.
(c) they resulted in a loss of tax dollars to society.
(d) they involved transfers of assets.

15. Which was not one of Buffett's big deals in the second half of 1989?
(a) GEICO.
(b) US Air.
(c) Gillette.
(d) Champion International.

Short Answer Questions

1. The Efficient Market Theory says that:

2. With zero-coupon bond, the borrower:

3. What other kind of family-owned business did Buffet buy?

4. Warren's philosophy for purchasing stocks included all but:

5. Mrs. B began in the furniture business by:

(see the answer keys)

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