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

Multiple Choice Questions

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

2. Which was not one of Buffett's big deals in the second half of 1989?
(a) GEICO.
(b) Gillette.
(c) US Air.
(d) Champion International.

3. What other kind of family-owned business did Buffet buy?
(a) grocery.
(b) advertising.
(c) jewelry.
(d) another furniture store.

4. In Congressional testimony, Buffett makes it clear that:
(a) he wanted the charges dropped.
(b) he would not cooperate with the government.
(c) he wanted the perpetrators of the crime prosecuted.
(d) he would tolerate no wrong doing at Salamon.

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

6. When Buffett is described as a gorilla, it refers to:
(a) none of the above.
(b) his manner of negotiation.
(c) his gruff manner.
(d) his protecting CEOs from a takeover.

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

8. What information did Jon Gutfruend withhold?
(a) the level of Salomon bonuses.
(b) that a Salomon trader made a false bid.
(c) Salomon bond revenues.
(d) Salomon trading strategy.

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

10. Buffett's annual shareholders meetings differed from those of other companies because:
(a) his were elegantly catered.
(b) he refused to hold shareholder meetings.
(c) his were well attended.
(d) he wouldn't attend his.

11. Warren's attitude toward leaving some money to his children changed when:
(a) the press became critical of him.
(b) he became closer with Susie and her family when they were living in Omaha.
(c) Susie said she would never speak to him.
(d) he became ill.

12. 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.

13. Regarding his textile mills, in the early 1980s, Buffett:
(a) closed them.
(b) continued to operate at a loss.
(c) sold them.
(d) made large capital investments.

14. What stock did Buffett begin to buy in the fall of 1988?
(a) ABC.
(b) Coca-Cola.
(c) NBC.
(d) Pepsi-Cola.

15. Warren's philosophy for purchasing stocks included all but:
(a) honest and competent management.
(b) favorable long-term prospects.
(c) decent stock price.
(d) anticipation of short-term price movements.

Short Answer Questions

1. Buffett's Graham group, his inner circle, met:

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

3. Buffett's role in protecting certain CEOs from takeovers was referred to as:

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

5. In Warren's view, the managers of other people's money:

(see the answer keys)

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