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

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

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

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

5. The Efficient Market Theory was popular because it:
(a) proved accurate.
(b) was based on technology.
(c) was simple.
(d) extended the theories of Adam Smith to financial markets.

Short Answer Questions

1. What did Susie unexpectedly do at the age of forty-five?

2. Which of the following was not a reason why Warren didn't move to Southern California?

3. Who does Buffett select to run Salomon?

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

5. In Congressional testimony, Buffett makes it clear that:

Short Essay Questions

1. 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?

2. What are zero coupon bonds that were being used to finance LBO?

3. Buffett was interested in buying media companies in the 1980s. Why did he invest in Cap Cities through Berkshire?

4. What were Buffett's views on hostile takeovers?

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

6. Why did Buiffett invest in Salomon?

7. What was Buffett's attitude about sharing his wealth with his children?

8. What stock did Buffett begin purchasing in 1988?

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

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

(see the answer keys)

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