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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. Why did US Air lose money after Buffett's investment?
(a) there was a strike.
(b) none of the above.
(c) the outbreak of the Persian Gulf War.
(d) their fleet was old.

2. What other kind of family-owned business did Buffet buy?
(a) grocery.
(b) advertising.
(c) jewelry.
(d) another furniture store.

3. Buffett's annual shareholders meetings differed from those of other companies because:
(a) his were well attended.
(b) his were elegantly catered.
(c) he wouldn't attend his.
(d) he refused to hold shareholder meetings.

4. With zero-coupon bond, the borrower:
(a) defers the interest payments.
(b) pays the interest in less than a year.
(c) makes regular interest payments.
(d) has no interest payments.

5. Which of the following was not a reason why Warren didn't move to Southern California?
(a) he would have to leave his long-time secretary.
(b) he would have to change his routine.
(c) he didn't want to leave the familiarity of Omaha.
(d) his anger at Susie.

Short Answer Questions

1. Berkshire was most active in:

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

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

4. Capital Cities was a:

5. Why did Buffett refuse to financially support his adult children?

Short Essay Questions

1. What was the newer Efficient Market Theory?

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

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

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

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

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

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

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

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

(see the answer keys)

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