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

Multiple Choice Questions

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

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

3. Daughter Susie moved back to Omaha when:
(a) her husband became the manager of the Buffet Foundation.
(b) Warren offered her money.
(c) she became ill.
(d) she divorced her husband.

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

5. Why did US Air lose money after Buffett's investment?
(a) there was a strike.
(b) the outbreak of the Persian Gulf War.
(c) their fleet was old.
(d) none of the above.

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

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

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

9. Which of the following was not a reason why Warren didn't move to Southern California?
(a) his anger at Susie.
(b) he would have to leave his long-time secretary.
(c) he would have to change his routine.
(d) he didn't want to leave the familiarity of Omaha.

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

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

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

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

14. Mrs. B began in the furniture business by:
(a) selling furniture out of her basement.
(b) working as a clerk in a furniture store in Omaha.
(c) buying a small furniture store and selling it.
(d) working in her father's store in Minsk.

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

Short Answer Questions

1. By the 1990s, Buffett was worth:

2. At a press conference, Buffet announced that he will:

3. How long did Buffett go without buying any common stock after the Cap Cities deal in 1985?

4. Buffett looked for stocks:

5. By the end of 1988, the Berkshire share price was approximately?

(see the answer keys)

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