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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. Preferred stock is considered with _________ that Munger and Buffett like, admire, and trust.

2. What was the stock market value of the company in #49 when it was first purchased by Buffett?

3. Buffett's ______ years of experience cause him to think that efficient times in the market do not constitute an efficient market.

4. Buffett is proud that ____% of the shares outstanding at the end of each year were held by the same shareholders.

5. Alternative investments were considered for __________ high quality investments when a preferable business could not be located.

Short Essay Questions

1. What was the main problem with the idea of efficient market theory, according to Buffett?

2. What would business contraction cause, though Buffett says this was also an opportune time for investment?

3. What were some of the issues that could come up within an annual meeting, which made Buffet want to avoid these meetings?

4. What was the key principle of Ben Graham that guided the way that Buffett bought other businesses?

5. What did Buffett and Charlie Munger do together, which led to the creation of this book?

6. What was the definition of the idea of risk arbitrage, according to the book?

7. What were some of the companies included in the purchases of Berkshire Hathaway under Munger and Buffett?

8. How did Buffett's criteria for buying companies and maintaining holdings help to maximize net worth in the long run?

9. Whose investing principles guided the Buffett purchase of Washington Post Company?

10. What was listed as the difference between a fallen angel and a junk bond?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Mr. Market was a fun character made up by Graham to teach marketing principles.

Part 1: Why do you think Mr. Market is a good representation of the modern day investor?

Part 2: Do you think Mr. Market is the same today as he was at the time of Graham's teachings?

Part 3: How might you compare Mr. Market to yourself in terms of how you would approach investing and financial decisions?

Essay Topic 2

Buffett and Munger didn't use a strategic plan of acquisition, but rather compared opportunities against passive investments.

Part 1: Why do you think Buffett and Munger didn't have a plan for acquisitions?

Part 2: Do you think it's a better idea to have a plan when dealing with more extensive acquisition deals?

Part 3: How do you think Buffett and Munger's approach benefits them?

Essay Topic 3

Buffett and Munger wanted fair and accurate reporting from all of their company CEOs at all times.

Part 1: Do you think it's possible to have fair and accurate reporting at all times?

Part 2: Why do you think it's important for CEOs to be accurate in their reporting?

Part 3: How do you think Buffett and Munger handled those CEOs who were not able to report on their company's status?

(see the answer keys)

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