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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay 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. Soon after Buffett arrives in New York, he learns that:
(a) the government dropped its investigation.
(b) he is voted off the board.
(c) the situation is more serious than he thought.
(d) the Treasury has banned Salomon from its auctions.

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

4. At the end of 1986, the approximate share price of Berkshire was?
(a) $950.
(b) $275.
(c) $1,500.
(d) $3,000.

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

Short Answer Questions

1. If Buffett made a loan to one of his children:

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

3. Which investment banking firm did Buffett invest in?

4. Buffet's view of stock index futures was:

5. Buffett's role in protecting certain CEOs from takeovers was referred to as:

Short Essay Questions

1. Why did Buiffett invest in Salomon?

2. How does Buffett describe the difference between his public and private lives?

3. What are referred to as Buffett's sweetheart deals?

4. What was the effect of irregularities in the bond trading by Salomon on traders?

5. What was the outcome of the government case against Salomon?

6. What did Buffett do with his textile mills?

7. What was one of Buffett's biggest fears in 1980?

8. How many people are employed at Buffett's world headquarters?

9. What stock did Buffett begin purchasing in 1988?

10. What did Susie do at the age of forty five?

(see the answer keys)

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