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

Multiple Choice Questions

1. _________ were often unwilling to discuss the business issues during meetings.
(a) Shareholders.
(b) The salespeople.
(c) Managers.
(d) The board members.

2. The bonds that Buffett decides to buy in 1989 were thought to be ________, but turn out to be fallen angels.
(a) Meaningless.
(b) Priceless.
(c) Evil.
(d) Junk.

3. Buffett managed by ________-related business principles, according to the book.
(a) Business.
(b) Owner.
(c) Math.
(d) Stock.

4. Buffett criticizes __________ market theory as be does not believe it to be a truth.
(a) Eradicant.
(b) Effective.
(c) Erasing.
(d) Efficient.

5. The _______ doesn't feel poorer when the embezzler is getting richer.
(a) Government.
(b) Country.
(c) Market.
(d) Victim.

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

7. What is NOT one of the companies listed as having the management requirements that Buffett and Munger want to see?
(a) USAir.
(b) Champion.
(c) Wal-Mart.
(d) Salomon.

8. The current value of the company Buffett and his partner bought showed that they understated its current ________ value.
(a) World.
(b) Market.
(c) Business.
(d) Intrinsic.

9. Keynes stated: "The right method of investment is to put fairly large sums of money into enterprises which one thinks one knows something about and in the ________ of which one thoroughly believes."
(a) Management.
(b) Philosophy.
(c) Product.
(d) Intrinsic value.

10. Risk ___________ was defined as the pursuit of profits from anticipated events, according to the book.
(a) Movement.
(b) Investing.
(c) Memories.
(d) Arbitrage.

11. What was the initial book value of the company that Buffett and his partner acquired in 1964?
(a) $19.46.
(b) $47.01.
(c) $35.00
(d) $10.67.

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

13. How many shareholders did Munger and Buffett pledge to provide fair and simultaneous reporting to?
(a) 300,000.
(b) 50%.
(c) 10.
(d) 15,000.

14. Many stocks had a _______, like Coca-Cola, but none have the same market share.
(a) Manner.
(b) Price.
(c) Risk.
(d) Beta.

15. What was the name of the bank that had substantial equity interest in Berkshire?
(a) Fifth Third.
(b) Bank of America.
(c) Chase.
(d) Wells Fargo.

Short Answer Questions

1. Value came from a fixed-income feature to set minimum value with __________ as a bonus.

2. What was coined as the term for the amount of undiscovered embezzlement?

3. What were the name of the bonds that were issued during WWI?

4. Buffett and his partner preferred to buy a company at a fair price at _______% interest.

5. Munger and Buffett act like ________ when it comes to considering the economic prospects of the businesses they buy.

(see the answer keys)

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