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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. As a result of the stock market crash in October 1985, Berkshire:
(a) increased in value.
(b) was insolvent.
(c) lost ten percent of its value.
(d) lost one quarter of its value.

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

3. Buffett appeared on:
(a) What's My Line.
(b) Lifestyles of the Rich and Famous.
(c) Johnny Carson.
(d) This is our Life.

4. Buffett's new worth was approximately:
(a) $2.3 billion.
(b) $3.8 billion.
(c) $1.35 billion.
(d) $900 million.

5. At a press conference, Buffet announced that he will:
(a) he resigns from the board.
(b) he will financially support the firm.
(c) serve as an interim unsalaried chairman for as long as he is needed.
(d) the government charges will be dropped.

Short Answer Questions

1. The Efficient Market Theory says that:

2. What was Buffett's annual Christmas gift to each of his children?

3. Buffet's view of stock index futures was:

4. With zero-coupon bond, the borrower:

5. The Treasure sells bonds to:

Short Essay Questions

1. Salomon became the object of an SEC and Justice Department investigation because of their bond trading. What did they do?

2. What was one of Buffett's biggest fears in 1980?

3. How many people are employed at Buffett's world headquarters?

4. What was the effect of irregularities in the bond trading by Salomon on traders?

5. Why did Buiffett invest in Salomon?

6. What was the outcome of the government case against Salomon?

7. What did Buffett plan to do with his wealth when he died?

8. Why wasn't Buffett adversely affected by the insurance market problems in 1985?

9. Buffett's career was based on the Graham and Dodds theory of investing. What are the basis of Buffet's beliefs based on the teachings of Graham and Dodds?

10. How did Buffett learn about the Nebraska Furniture Mart?

(see the answer keys)

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