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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. Any new investment must use a lot of large amounts of _________, according to the book.

2. Accounting for the purchase of a business required allocating the ________ first to the fair value of net assets.

3. Pooling overcame the deficiency of ____________ amortization in a merger, which was really a purchase.

4. While Munger and Buffett were excited when they are in the process of acquiring a new business, they were also _________.

5. Businesses must recognize present value _______ for post-retirement health benefits, according to Buffett.

Short Essay Questions

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

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

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

4. What did Buffett say should happen to some earnings in dividends?

5. 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?

6. To what other experience did Buffett compare the process of acquiring a business?

7. What was the piece of advice from a golf pro that Buffett takes to heart in his acquisition strategy?

8. What question emerged during the merger between Berkshire and Blue Chip in 1983?

9. What were the three main thing that shareholders always knew about Munger and Buffett?

10. What was the expected benefit for the Berkshire NYSE listing, according to the book?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

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?

Essay Topic 2

Buffett decided to buy a company when their stock market value was less than their intrinsic value.

Part 1: Do you think Buffett should pay the intrinsic value or the stock market value?

Part 2: Why do you think a company might be worth less in the market than they are intrinsically?

Part 3: How do you think Buffett might approach a conversation about buying a company that has a lower market value?

Essay Topic 3

Buffett didn't like to invest in banking because of the leverage involved. Banks were too difficult as investments most of the time.

Part 1: Do you think that banks can be good investment choices?

Part 2: Why do you think it might be better to stay away from banks as investments?

Part 3: How do you think a bank might become a better investment for a larger company?

(see the answer keys)

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