Buffett: The Making of an American Capitalist Test | Final Test - Easy

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

Multiple Choice Questions

1. With zero-coupon bond, the borrower:
(a) makes regular interest payments.
(b) defers the interest payments.
(c) pays the interest in less than a year.
(d) has no interest payments.

2. Mrs. B began in the furniture business by:
(a) selling furniture out of her basement.
(b) working in her father's store in Minsk.
(c) working as a clerk in a furniture store in Omaha.
(d) buying a small furniture store and selling it.

3. Mrs. B built her furniture store into the biggest furniture store in the:
(a) midwest.
(b) country.
(c) city.
(d) state.

4. What was Buffett's annual Christmas gift to each of his children?
(a) anything they wanted.
(b) $10,000 the tax deductible limit on gifts to family members.
(c) ten shares of Berkshire stock.
(d) vacations.

5. One thing that Buffett did that resulted in many people leaving the firm was to:
(a) lower the bonuses.
(b) cancel vacations.
(c) move to a smaller building.
(d) give raises to maintain morale.

6. Buffett's Graham group, his inner circle, met:
(a) every odd year.
(b) every six months.
(c) monthly.
(d) yearly.

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

8. When is a squeeze considered illegal?
(a) if the traders commit the squeeze.
(b) if traders conspire to manipulate prices.
(c) if the trader profits.
(d) if the trader doesn't reveal the information.

9. Buffett looked for stocks:
(a) whose value was greater than its price.
(b) that had an attractive annual report.
(c) that was owned by people he knew.
(d) that had a product he believed in.

10. Buffett's annual shareholders meetings differed from those of other companies because:
(a) his were well attended.
(b) he wouldn't attend his.
(c) he refused to hold shareholder meetings.
(d) his were elegantly catered.

11. 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.

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

13. Buffet's view of stock index futures was:
(a) they would benefit the market.
(b) they should be abandoned.
(c) he relied on them.
(d) they would lead to excess speculation.

14. Salomon grew from 1955 on when they announced:
(a) they went public.
(b) partners would leave their capital in the firm.
(c) they were purchased by J.P. Morgan.
(d) they would ac cept no new partners.

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

Short Answer Questions

1. Why is finance the opposite of investing?

2. In Congressional testimony, Buffett makes it clear that:

3. Warren's attitude toward leaving some money to his children changed when:

4. The settlement of the public and private cases cost Salomon:

5. Who handled Berkshire's investments:

(see the answer keys)

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