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This quiz consists of 5 multiple choice and 5 short answer questions through Common Stock.

Multiple Choice Questions

1. Buffett dismissed risk in his choices with his notion that falling __________ prices present an opportunity to buy.
(a) Bond.
(b) Checking.
(c) Mortgage.
(d) Stock.

2. What was NOT one of the elements listed in the elements of arbitrage in the book?
(a) Likelihood that money is committed.
(b) Change a competing event occurs.
(c) Expected internal action.
(d) Length of time money is committed.

3. Which state was Buffett worried about in terms of its ability to create good investments for his company?
(a) Illinois.
(b) Hawaii.
(c) Alabama.
(d) California.

4. Berkshire was a ________ corporation, as it was described in this section of the book.
(a) Public.
(b) Co-owned.
(c) Shared.
(d) Private.

5. Two super contagious diseases in the investment world included _______ and greed, according to the book.
(a) Fear.
(b) Rationality.
(c) Pain.
(d) Ignorance.

Short Answer Questions

1. Confusing ________ requirements were offset by the partners' willingness to report look-through earnings.

2. Buffett criticizes __________ market theory as be does not believe it to be a truth.

3. Buffett and Munger both opposed any selective ________ and predictive growth rates from the CEOs who reported them.

4. Owners were expected to conclude that retained _______ were better left in the corporation for reinvestment at a higher rate than paid out as dividends.

5. Buffett thought that any CEO who set earning targets and forecasts might also take ______ with accounting measures.

(see the answer key)

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