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

Multiple Choice Questions

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

2. Berkshire was most active in:
(a) promoting auto insurance.
(b) door to door policy selling.
(c) reinsurance.
(d) business insurance.

3. The Nebraska Furniture Mart was owned by:
(a) Rose Blumkin.
(b) Seabury Stanton.
(c) Isadore Blumkin.
(d) Katherine Graham.

4. Susie's absence made life:
(a) difficult for Warren.
(b) game Warren more freedom.
(c) made Warren more self-sufficient.
(d) made Warren happier.

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

6. The head of Salomon was:
(a) Jon Gutfreund.
(b) Gedale Horowitz.
(c) Paul Mozto.
(d) Henry Kaufman.

7. When is a squeeze considered illegal?
(a) if the trader profits.
(b) if the trader doesn't reveal the information.
(c) if traders conspire to manipulate prices.
(d) if the traders commit the squeeze.

8. In Warren's view, the managers of other people's money:
(a) bore a heavy burden.
(b) could act as they want.
(c) had to responsibility to others.
(d) had to have approval for any of their actions.

9. How many people worked at Berkshire's world headquarters:
(a) twenty seven.
(b) fifty.
(c) eleven.
(d) two hundred fifty.

10. What did Buffett always look at, especially in insurance?
(a) premiums.
(b) odds.
(c) growth potential.
(d) profit.

11. With zero-coupon bond, the borrower:
(a) has no interest payments.
(b) pays the interest in less than a year.
(c) makes regular interest payments.
(d) defers the interest payments.

12. At the end of 1986, the approximate share price of Berkshire was?
(a) $275.
(b) $950.
(c) $1,500.
(d) $3,000.

13. Why did Buffett buy into Cap Cities?
(a) to infuse it with capital and to provide stability for its merger with ABC.
(b) he was looking to diversify.
(c) the price was cheap.
(d) it was a good deal.

14. Buffett wanted his money to be used for:
(a) whatever he wanted.
(b) social good.
(c) whatever Susie wanted.
(d) his children.

15. Which of the following companies was the object of a hostile takeover in the 1980s?
(a) Time.
(b) General Goods.
(c) Berkshire.
(d) Revlon.

Short Answer Questions

1. Capital Cities was a:

2. Why is finance the opposite of investing?

3. Daughter Susie moved back to Omaha when:

4. Which of the following was not one of the permanent three in Berkshire's portfolio?

5. Buffett's theory of trading is based on:

(see the answer keys)

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