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

2. Buffett looked for stocks:
(a) that had an attractive annual report.
(b) that was owned by people he knew.
(c) whose value was greater than its price.
(d) that had a product he believed in.

3. What did Susie unexpectedly do at the age of forty-five?
(a) tried to commit suicide.
(b) moved out of Buffett's house and into a San Francisco apartment.
(c) filed for divorce.
(d) returned to school.

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

5. Why is finance the opposite of investing?
(a) finance describes the corporate view of fund raising.
(b) finance is based on Graham and Dodds theory.
(c) finance is the same as investing.
(d) finance is based on Efficient Market Theory.

Short Answer Questions

1. Capital Cities was a:

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

3. Cap Cities would use the money from Berkshire to:

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

5. Buffett's views on hostile takeovers included all but:

Short Essay Questions

1. What kind of stocks did Buffett look for?

2. What did Buffett do with his textile mills?

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

4. What are referred to as Buffett's sweetheart deals?

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

6. 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?

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

8. What was one of the first things Buffett did at Salomon?

9. What did Susie do at the age of forty five?

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

(see the answer keys)

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