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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. When Gutfreund resigned:
(a) the company went out of business.
(b) he was indicted.
(c) Warren Buffett stepped in as CEO.
(d) a massive fraud was uncovered.

2. Who does Buffett select to run Salomon?
(a) Nicholas Brady.
(b) JM Meriwether.
(c) Paul Mozer.
(d) Deryck Maughan.

3. Which was not one of Buffett's big deals in the second half of 1989?
(a) US Air.
(b) Gillette.
(c) GEICO.
(d) Champion International.

4. Why did Buffett refuse to financially support his adult children?
(a) he wanted them to lead normal, independent lives.
(b) he was too cheap.
(c) he had other uses for his money.
(d) he was angry with them.

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

Short Answer Questions

1. When Buffett is described as a gorilla, it refers to:

2. Buffett appeared on:

3. How long did Buffett go without buying any common stock after the Cap Cities deal in 1985?

4. How much did Buffett pay for Nebraska Furniture Mart?

5. Salomon grew from 1955 on when they announced:

Short Essay Questions

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

2. What was the newer Efficient Market Theory?

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

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

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

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

7. What kind of stocks did Buffett look for?

8. Why did Buiffett invest in Salomon?

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

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

(see the answer keys)

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