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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. When did Berkshire Hathaway begin as a textile company?

2. The bonds that Buffett decides to buy in 1989 were thought to be ________, but turn out to be fallen angels.

3. Risk ___________ was defined as the pursuit of profits from anticipated events, according to the book.

4. Who did Buffett authorize to use the essays in the book to popularize the teachings and Buffett's own implementation of the teachings?

5. Some Berkshire insurance subsidiaries used _______ with its greater returns than to use Treasury Bils.

Short Essay Questions

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

2. What did Buffett fear about investing in companies that were located in California?

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

4. What is the content of this book often used for, according to the author?

5. What were two of the benefits of zero-coupon bonds, as listed by Berkshire in their promotions?

6. What happened as a result of Buffett and Munger buying their holding companies at a fair rate or buying lesser interest in at the pro-rata price?

7. What was the purpose of the fourteen owner-related business principles that Buffett lists in the book?

8. What was the concept of fallen angels, according to Buffett's lessons about investing?

9. What did Buffett have to say about the idea of annual meetings for shareholders and other business managers?

10. What were the five different categories from which Buffett can select his investments?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

The textile company grew from a simple company to one that was a multi-million dollar corporation over time.

Part 1: Do you think it's the dream of all companies to become multi-million dollar companies?

Part 2: Why do you think Buffett and Munger aspired to do more with the company they had?

Part 3: Would you rather stay as one company or try to grow bigger over time?

Essay Topic 2

Buffett and Munger thought it was better to monitor management as an investment strategy.

Part 1: How does management impact the way that a company works?

Part 2: Do you think management can be something that predicts financial stability?

Part 3: Why do you think Munger and Buffett looked at management to determine their investments?

Essay Topic 3

There are some companies that Berkshire Hathaway owns that they will not sell no matter what the offered price might be.

Part 1: Why are the permanent companies so important to Berkshire Hathaway?

Part 2: What would you do if you were offered three times the value of a permanent company's price?

Part 3: Do you think it's a good idea to have permanent companies in a portfolio?

(see the answer keys)

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