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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. Cap Cities would use the money from Berkshire to:
(a) invest in the satellite business.
(b) buy ABC.
(c) diversify.
(d) modernize.

2. Buffet's view of stock index futures was:
(a) they would lead to excess speculation.
(b) they would benefit the market.
(c) he relied on them.
(d) they should be abandoned.

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

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

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

Short Answer Questions

1. Warren's philosophy for purchasing stocks included all but:

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

3. Who handled Berkshire's investments:

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

5. Capital Cities was a:

Short Essay Questions

1. Why did Buiffett invest in Salomon?

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

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

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

5. What kind of stocks did Buffett look for?

6. What stock did Buffett begin purchasing in 1988?

7. What was the newer Efficient Market Theory?

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

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

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

(see the answer keys)

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