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. As a result of the stock market crash in October 1985, Berkshire:
(a) increased in value.
(b) lost ten percent of its value.
(c) was insolvent.
(d) lost one quarter of its value.

2. Daughter Susie moved back to Omaha when:
(a) her husband became the manager of the Buffet Foundation.
(b) Warren offered her money.
(c) she divorced her husband.
(d) she became ill.

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

4. If Buffett made a loan to one of his children:
(a) they had to sign a loan agreement.
(b) he would berate them for needing money.
(c) he refused to help them.
(d) they were afraid to ask.

5. By the end of 1988, the Berkshire share price was approximately?
(a) $8,000.
(b) $1,000.
(c) $5,500.
(d) $2,500.

6. Which investment banking firm did Buffett invest in?
(a) Smith Barney.
(b) Salomon.
(c) Merrill Lynch.
(d) J.P. Morgan.

7. Capital Cities was a:
(a) big cable, broadcasting and publishing company.
(b) clothing company.
(c) heavy equipment company.
(d) real estate company.

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

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

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

11. Warren's philosophy for purchasing stocks included all but:
(a) honest and competent management.
(b) decent stock price.
(c) favorable long-term prospects.
(d) anticipation of short-term price movements.

12. Susie's absence made life:
(a) made Warren more self-sufficient.
(b) difficult for Warren.
(c) game Warren more freedom.
(d) made Warren happier.

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

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

15. Which of the following companies was the object of a hostile takeover in the 1980s?
(a) General Goods.
(b) Time.
(c) Berkshire.
(d) Revlon.

Short Answer Questions

1. Buffett differed from other CEOs in that he:

2. Soon after Buffett arrives in New York, he learns that:

3. The Efficient Market Theory was popular because it:

4. With zero-coupon bond, the borrower:

5. Which of the following was not a reason why Warren didn't move to Southern California?

(see the answer keys)

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