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

Multiple Choice Questions

1. Berkshire might evolve into a _______ form of board situation, upon Buffett's death, according to the book.
(a) Second.
(b) Dissolved.
(c) Fourth.
(d) Third.

2. The margin of ________ was the cornerstone of investment success, according to Graham.
(a) Safety.
(b) Reward.
(c) Risk.
(d) Error.

3. Buffett's long term economic goal was to maximize per share _________ value of Berkshire stock by owning a diversified group of businesses.
(a) Intrinsic.
(b) Economic.
(c) Market.
(d) True.

4. The partners considered a lesser interest if the ________ price was less than what it would be for 100%.
(a) Pro-biotic.
(b) Pro-rata.
(c) Pro-management.
(d) Pro-rate.

5. The purchase of the company listed in #49 was influenced by whose investing principles?
(a) Warren Buffett.
(b) Ben Graham.
(c) No one's.
(d) Charlie Munger.

6. What was the name of the bond holdings that Buffett added to Berkshire in 1989?
(a) General Mills.
(b) Arrowhead.
(c) Pepsi.
(d) RJR Nabisco.

7. What was the value of the shares of the company that Buffett and his partner purchased thirty years after its purchase?
(a) $25,000 per share.
(b) $10,000 per share.
(c) $40,000 per share.
(d) $15,000 per share.

8. Confusing ________ requirements were offset by the partners' willingness to report look-through earnings.
(a) Market.
(b) Accounting.
(c) Stock.
(d) Tax.

9. Preferred firms must pay returns above ______ investments and be compatible with management.
(a) Mr. Market.
(b) Fixed-income.
(c) Past.
(d) Future.

10. How many owner-related business principles were listed in this section of the book by Buffett?
(a) 10.
(b) 7.
(c) 25.
(d) 14.

11. Buffett's criteria measured _________ expectations of the highest after-tax returns to maximize net worth in the long run.
(a) Probable.
(b) Mathematical.
(c) Accounting.
(d) Emotional.

12. Buffett is proud that ____% of the shares outstanding at the end of each year were held by the same shareholders.
(a) 99.
(b) 90.
(c) 50.
(d) 98.

13. _________ can be foolish, according to the lessons in this chapter, foolhardy even, or just be fooling buyers and sellers.
(a) Smith.
(b) Mr. Market.
(c) Buffett.
(d) Mr. Big.

14. What was the stock market value of the company in #49 when it was first purchased by Buffett?
(a) $500M.
(b) $300M.
(c) $100M.
(d) $250M.

15. In some cases, the benefits of partial ownership earnings may far outweigh the ________ acquisition cost.
(a) Fees and.
(b) Per-share.
(c) Value.
(d) Market.

Short Answer Questions

1. Buffett believed that many annual ________ were a waste of time for the shareholders and the management.

2. What was the name of the company that Buffett and Munger bought in 1973?

3. How many shareholders did Munger and Buffett pledge to provide fair and simultaneous reporting to?

4. Buffett and Munger bought _________ companies the same way they might buy private companies.

5. Popular theory at the time said that the market was totally efficient at _________ investment.

(see the answer keys)

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