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

Multiple Choice Questions

1. Buffett differed from other CEOs in that he:
(a) he did most of his work at home.
(b) he did not have an office.
(c) he hired a variety of secretaries.
(d) did not have a structured appointments schedule.

2. Soon after Buffett arrives in New York, he learns that:
(a) the situation is more serious than he thought.
(b) he is voted off the board.
(c) the Treasury has banned Salomon from its auctions.
(d) the government dropped its investigation.

3. If Buffett made a loan to one of his children:
(a) he would berate them for needing money.
(b) they had to sign a loan agreement.
(c) they were afraid to ask.
(d) he refused to help them.

4. Buffett's Graham group, his inner circle, met:
(a) every odd year.
(b) yearly.
(c) every six months.
(d) monthly.

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

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

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

8. Capital Cities was a:
(a) heavy equipment company.
(b) big cable, broadcasting and publishing company.
(c) real estate company.
(d) clothing company.

9. Why did Buffett refuse to financially support his adult children?
(a) he wanted them to lead normal, independent lives.
(b) he was angry with them.
(c) he was too cheap.
(d) he had other uses for his money.

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

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

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

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

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

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

Short Answer Questions

1. Which was not one of Buffett's big deals in the second half of 1989?

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

3. Susie's absence made life:

4. Which investment banking firm did Buffett invest in?

5. Mrs. B began in the furniture business by:

(see the answer keys)

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