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

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

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

3. Buffett and Munger were often asked to ________ under the assumption it would benefit shareholders, but they disagree.
(a) Sell stock.
(b) Split stock.
(c) Buy more holdings.
(d) Keep stock.

4. ___________ were used to pay salaries and wages, which eliminated payroll with increased employee compensation.
(a) Increased notes.
(b) Common stocks.
(c) Option warrants.
(d) Valued shares.

5. The benefits of __________ were retained by Berkshire since it was a strong franchise.
(a) Tax reduction.
(b) Fair market value.
(c) Reporting.
(d) Shareholder meetings.

Short Answer Questions

1. Whose approach did other companies try to use in order to emulate Berkshire?

2. In the past, the distinction between economic and accounting goodwill was insignificant when Buffett sought firms with tangible _______, rather than firms relying on economic goodwill.

3. Buffett and Munger described the acquisition process as being akin to finding a ________.

4. Some CEOs think that manipulating __________ could encourage the highest stock price available.

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

Short Essay Questions

1. What was the strategy that Buffett employed in order to acquire businesses, after learning the lesson from the golf pro?

2. What was the purpose of Buffett and Munger focusing on buying up 100% of a company and the investment must use a lot of capital?

3. What were the two super contagious diseases that could spread in the investment community?

4. What was done in order to minimize any loss from accounting adjustments during the US Steel transactions?

5. What did Buffett prefer in trading that allowed for more benefits to long-term owners of stock?

6. What did Buffett try to do in order to avoid problems with the two contagious diseases in the investment community?

7. What happened as the result of the fictional accounting actions by US Steel?

8. What were the two categories of most interest for Munger and Buffett when they wanted to add to their holdings?

9. What did Buffett want to do with the Berkshire stock on the NYSE?

10. What was the first step in the US Steel fictional accounting process?

(see the answer keys)

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