The Essays of Warren Buffett: Lessons for Corporate America Test | Final Test - Easy

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

Multiple Choice Questions

1. Some CEOs think that manipulating __________ could encourage the highest stock price available.
(a) Mergers.
(b) Portfolios.
(c) Earnings.
(d) Reports.

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

3. How many shareholders did a business that wanted to be on the NYSE have to have?
(a) 2000.
(b) 5000.
(c) 10,000.
(d) 100.

4. If the buyer's stock was sold at less than intrinsic value, he bought with undervalued _________ and would suffer an unequal exchange.
(a) Markets.
(b) Currency.
(c) Dividends.
(d) Companies.

5. Buffett stated that his position with any stock repurchase does not imply acceptance of _______, which he calls extortion.
(a) Blue chip mail.
(b) Redmail.
(c) Blackmail.
(d) Greenmail.

6. Buffett and Munger believed that marketability and __________ were two terms that increased the likelihood of turnover.
(a) Possibility.
(b) Fluidity.
(c) Stability.
(d) Liquidity.

7. The question of an exchange of stock arose in 1983 during the merger of Berkshire and ____________.
(a) Blue Chip.
(b) Wal-Mart.
(c) Blue Note.
(d) Coca-Cola.

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

9. Buffett admitted that issuing ________ in mergers cost shareholders money, according to the book.
(a) Bonds.
(b) Announcements.
(c) Bills.
(d) Stock.

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

11. The satire talked about charging off ________ value to negative one million dollars so the company could convert depreciation cost to annual appreciation gain.
(a) Variable assets.
(b) Shareholders.
(c) Fixed assets.
(d) Promised.

12. All acquisition considerations were paid for in ________, according to the book's information.
(a) Handshakes.
(b) Trades.
(c) Cash.
(d) Stocks.

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

14. Information helped investors see the likelihood of a company meeting future __________.
(a) Stock prices.
(b) Mergers.
(c) Promises.
(d) Obligations.

15. _________ was spurious, to Buffett, compared to depreciation charges for deteriorating assets.
(a) Amortization.
(b) Acquisition investment.
(c) Annual reporting.
(d) Stock market value.

Short Answer Questions

1. A stock _______ might attractive investors unlike their current investor group which might downgrade the quality of the shares.

2. Options were often ______ at exercise which made them more expensive than publicly traded options.

3. Munger believed the _________ Berkshire paid to be acceptable for the benefits they received.

4. A company might consider repurchasing _______ when it has available funds that are above long-term needs.

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

(see the answer keys)

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