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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. Which of the following companies was the object of a hostile takeover in the 1980s?
(a) Revlon.
(b) Berkshire.
(c) General Goods.
(d) Time.

2. In the 1980-84 period, insurance companies:
(a) stopped paying claims.
(b) cut premiums trying to maintain market share.
(c) stopped accepting new business.
(d) none of the above.

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

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

5. 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.

Short Answer Questions

1. The head of Salomon was:

2. Buffett differed from other CEOs in that he:

3. What did Buffett always look at, especially in insurance?

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

5. What term is used to denote risk?

Short Essay Questions

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

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

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

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

5. How does Buffett describe the difference between his public and private lives?

6. Why did Buiffett invest in Salomon?

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

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

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

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

(see the answer keys)

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