|Name: _________________________||Period: ___________________|
This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.
Short Answer Questions
1. The question of an exchange of stock arose in 1983 during the merger of Berkshire and ____________.
2. Buffett was often frustrated with _________, even though it was valuable for business practices.
3. Options were often ______ at exercise which made them more expensive than publicly traded options.
4. Berkshire's consolidated statements met outside __________, according to the book.
5. The NYSE listing for Berkshire was thought to reduce _______ for shareholders by ensuring a narrow market maker spread.
Short Essay Questions
1. What did Buffett try to do in order to avoid problems with the two contagious diseases in the investment community?
2. What was the first step in the US Steel fictional accounting process?
3. What could Berkshire shareholders be assured of, according to Buffett in the book?
4. 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?
5. What happened as the result of the fictional accounting actions by US Steel?
6. Despite his frustration with the GAAP, what did Buffett come to realize about accounting data?
7. What was done in order to minimize any loss from accounting adjustments during the US Steel transactions?
8. What was the simple rule that Buffett followed when it came to exchange of stock during a merger?
9. What were the two categories of most interest for Munger and Buffett when they wanted to add to their holdings?
10. What did Buffett admit that he used to do when seeking out new investments thirty-five years ago?
Write an essay for ONE of the following topics:
Essay Topic 1
Buffett and Munger stated at several points that buying things at a fair price is a reasonable action to take.
Part 1: Do you think there is such a thing as a fair price?
Part 2: Who should be in charge of determining what a fair price might be?
Part 3: How do you determine what a fair price for an item or a service might be?
Essay Topic 2
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 3
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?
This section contains 644 words
(approx. 3 pages at 300 words per page)