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

Multiple Choice Questions

1. While Munger and Buffett were excited when they are in the process of acquiring a new business, they were also _________.
(a) Complacent.
(b) Unhurried.
(c) Rational.
(d) Bored.

2. The common stock par value was reduced to _________, according to the book.
(a) One quarter.
(b) One dime.
(c) One dollar.
(d) One cent.

3. Any new investment must use a lot of large amounts of _________, according to the book.
(a) Meetings.
(b) Management.
(c) Energy.
(d) Capital.

4. Buffett was often frustrated with _________, even though it was valuable for business practices.
(a) GAAT.
(b) GLAD.
(c) GAAP.
(d) GLAT.

5. Berkshire kept the business operating after the acquisition, since it would already have successful ___________.
(a) Movement.
(b) Debts.
(c) Management.
(d) Practices.

6. Generally, earnings were reported when classified by a company as more than _______ owned.
(a) 50%.
(b) 10%.
(c) 25%.
(d) 99%.

7. Two super contagious diseases in the investment world included _______ and greed, according to the book.
(a) Rationality.
(b) Ignorance.
(c) Pain.
(d) Fear.

8. Pooling overcame the deficiency of ____________ amortization in a merger, which was really a purchase.
(a) Projected.
(b) Promised.
(c) Goodwill.
(d) Peaceful.

9. Whose approach did other companies try to use in order to emulate Berkshire?
(a) Graham.
(b) Munder.
(c) Mulder.
(d) Smith.

10. The different classes of stock allow _______ investors to still have value for the money they can spend.
(a) Short-term.
(b) Small.
(c) Large.
(d) Long-term.

11. _______ transactions only allowed stock be paid compared to a purchase in which cash or stock and cash or other valuable consideration may be paid.
(a) Dripping.
(b) Pooling.
(c) Static.
(d) Moving.

12. Owners were expected to conclude that retained _______ were better left in the corporation for reinvestment at a higher rate than paid out as dividends.
(a) Shares.
(b) Earnings.
(c) Losses.
(d) Values.

13. Buffett and Munger did not operate a strategic plan for __________ but compare opportunities against passive investments.
(a) Stockholders.
(b) Buyouts.
(c) Acquisitions.
(d) Reports.

14. Buffett avoids _________ share value to existing shareholders by true value for value merger, using stock as inflated currency.
(a) Diluting.
(b) Stabilizing.
(c) Increasing.
(d) Dispersing.

15. The NYSE listing for Berkshire was thought to reduce _______ for shareholders by ensuring a narrow market maker spread.
(a) Instability.
(b) Transaction costs.
(c) Price of stock.
(d) Variance.

Short Answer Questions

1. During what year were the Berkshire shares to be traded on the New York Stock Exchange?

2. Many ended up taking Buffett and Munger ________ on faith because of the way that they reported.

3. What was NOT one of the three tax-free gifting tactics that Buffett suggested to shareholders?

4. Warrants exercised for a penny par add ________ to credit capital surplus, according to the book.

5. The benefits of __________ were retained by Berkshire since it was a strong franchise.

(see the answer keys)

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