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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) he is voted off the board.
(b) the government dropped its investigation.
(c) the Treasury has banned Salomon from its auctions.
(d) the situation is more serious than he thought.

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

3. Mrs. B built her furniture store into the biggest furniture store in the:
(a) state.
(b) midwest.
(c) country.
(d) city.

4. The settlement of the public and private cases cost Salomon:
(a) $490 million.
(b) $125 million.
(c) $400 million.
(d) $45 million.

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

Short Answer Questions

1. If Buffett made a loan to one of his children:

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

3. The Nebraska Furniture Mart was owned by:

4. Regarding his textile mills, in the early 1980s, Buffett:

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

Short Essay Questions

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

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

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

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

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

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

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

8. 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?

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

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

(see the answer keys)

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