|Name: _________________________||Period: ___________________|
This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.
Short Answer Questions
1. Buffett and his partner preferred to buy a company at a fair price at _______% interest.
2. Popular theory at the time said that the market was totally efficient at _________ investment.
3. _________ can be foolish, according to the lessons in this chapter, foolhardy even, or just be fooling buyers and sellers.
4. Buffett and Munger saw themselves as general _______ responsible to other shareholders.
5. Berkshire might evolve into a _______ form of board situation, upon Buffett's death, according to the book.
Short Essay Questions
1. What did Buffett and Munger invest based upon, instead of price quotes?
2. How did Buffett seek to define a corporation as a mechanism? What exactly did this mean?
3. What was the key principle of Ben Graham that guided the way that Buffett bought other businesses?
4. What was the definition of the idea of risk arbitrage, according to the book?
5. What were some of the companies included in the purchases of Berkshire Hathaway under Munger and Buffett?
6. Where did Berkshire directors have most of their net worth invested, according to the book?
7. What did Buffett and Charlie Munger do together, which led to the creation of this book?
8. What might a CEO do if they were unlikely to dispose of their successful operating business, according to Buffett?
9. What did Buffett and Munger prefer to do when they invested in a company?
10. What did Buffett and Munger commit to providing to their 300,000 shareholders?
Write an essay for ONE of the following topics:
Essay Topic 1
Some bonds started out as junk, but ended up being angel bonds, according to one of the essays in this book.
Part 1: Do you think that investing is a guessing game?
Part 2: How do you think a person can make the best possible decision about their investments?
Part 3: Why do you think some junk investments might end up being better investments than they seemed?
Essay Topic 2
Buffett pointed out that just because the market was often efficient does not mean that it is always efficient.
Part 1: Why do you think the idea of an efficient market is something to consider?
Part 2: How do you think an efficient market can impact the outcome of a financial transaction?
Part 3: Do you believe that the market is designed to be efficient?
Essay Topic 3
Warren and Charlie likened the process of acquiring a business to that of finding a spouse.
Part 1: Why is it exciting to acquire another company?
Part 2: What are some of the reasons for acquiring another company?
Part 3: Do you think companies need to buy other companies in order to be successful?
This section contains 619 words
(approx. 3 pages at 300 words per page)