View a FREE sample

This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. Buffett's theory of trading is based on:
(a) Efficient Market Theory.
(b) Graham and Dodds.
(c) Randon Walk.
(d) Accurate price forecasts.

2. Who handled Berkshire's investments:
(a) Buffett alone.
(b) his staff of fourteen traders.
(c) Charlie Munger.
(d) Buffett and Bill Scott.

3. Which of the following is not part of Buffett's guide to selecting stocks?
(a) doing his own market analysis.
(b) trading on tips.
(c) ignoring macroeconomic trends and forecasts.
(d) stocks within one's circle of competence.

4. Who does Buffett select to run Salomon?
(a) Deryck Maughan.
(b) Nicholas Brady.
(c) Paul Mozer.
(d) JM Meriwether.

5. What term is used to denote risk?
(a) beta.
(b) gamma.
(c) alpha.
(d) theta.

6. Which investment banking firm did Buffett invest in?
(a) Salomon.
(b) Smith Barney.
(c) Merrill Lynch.
(d) J.P. Morgan.

7. Buffet's view of stock index futures was:
(a) they would lead to excess speculation.
(b) they would benefit the market.
(c) he relied on them.
(d) they should be abandoned.

8. Which of the following was not one of the permanent three in Berkshire's portfolio?
(a) IBM.
(b) Cap Cities.
(c) Washington Post.
(d) GEICO.

9. The Efficient Market Theory was popular because it:
(a) was simple.
(b) extended the theories of Adam Smith to financial markets.
(c) proved accurate.
(d) was based on technology.

10. How much did Buffett pay for Nebraska Furniture Mart?
(a) $5 million.
(b) $25 million.
(c) $10 million.
(d) $60 million.

11. What does Buffett say about the hostile takeover of Time?
(a) it was an example of the destructive tactics of the merger era.
(b) it could have been handled better.
(c) it was a good merger.
(d) it showed how smoothly the market worked.

12. Cap Cities would use the money from Berkshire to:
(a) invest in the satellite business.
(b) diversify.
(c) modernize.
(d) buy ABC.

13. How long did Buffett go without buying any common stock after the Cap Cities deal in 1985?
(a) one year.
(b) three years.
(c) six months.
(d) eighteen months.

14. Mrs. B built her furniture store into the biggest furniture store in the:
(a) city.
(b) midwest.
(c) country.
(d) state.

15. The Treasure sells bonds to:
(a) the highest bidder.
(b) the Fed.
(c) the public.
(d) banks only.

Short Answer Questions

1. Buffett wanted his money to be used for:

2. Warren's attitude toward leaving some money to his children changed when:

3. One thing that Buffett did that resulted in many people leaving the firm was to:

4. Susie's absence made life:

5. Why did Buffett buy into Cap Cities?

(see the answer keys)

This section contains 449 words (approx. 2 pages at 300 words per page) View a FREE sample