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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. The _______ doesn't feel poorer when the embezzler is getting richer.
(a) Country.
(b) Victim.
(c) Government.
(d) Market.

2. The content of the book was often used as a standard text at the Cardozo School of __________.
(a) Business.
(b) Law.
(c) Engineering.
(d) Medicine.

3. Preferred firms must pay returns above ______ investments and be compatible with management.
(a) Fixed-income.
(b) Past.
(c) Future.
(d) Mr. Market.

4. Buffett managed by ________-related business principles, according to the book.
(a) Stock.
(b) Math.
(c) Owner.
(d) Business.

5. Some Berkshire insurance subsidiaries used _______ with its greater returns than to use Treasury Bils.
(a) Risky stocks.
(b) Arbitrage.
(c) Investment games.
(d) Mediation.

6. The intrinsic business value goal was reached by ________, preferably 100% ownership of diverse business firms generating cash and above-average returns on capital.
(a) Prominent.
(b) Passive.
(c) Indirect.
(d) Direct.

7. The $70B enterprise that Buffett and his partner buy includes GEICO and ________ corporation.
(a) General Mills.
(b) Microsoft.
(c) Apple.
(d) GE Re.

8. A bond is _______ with regular payment of interest and repayment of principle.
(a) Debt.
(b) A promise.
(c) A loan.
(d) Nothing.

9. Buffett did not expand, borrow, or sell unless Berkshire received as much _________ as it gave.
(a) Dividends.
(b) Power.
(c) Value.
(d) Promise.

10. What company did Buffett acquire in 1964, which he eventually grew into a large holding company?
(a) Berkshire.
(b) Textile.
(c) Microsoft.
(d) Wal-Mart.

11. _________ percentage ownership was acquired when the market presented opportunities, according to the book.
(a) More.
(b) Greater.
(c) Lesser.
(d) Beholden.

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

13. Berkshire invested in companies with excellent economic prospects and outstanding __________.
(a) Ideas.
(b) Stock prices.
(c) Websites.
(d) Managers.

14. Below investment grade bonds are generally called ________, since they are able to be transformed.
(a) Demons.
(b) Fallen angels.
(c) Junky bonds.
(d) Caterpillars.

15. When did Berkshire Hathaway begin as a textile company?
(a) Early 1900s.
(b) 1956.
(c) 1967.
(d) Early 1800s.

Short Answer Questions

1. What did a bondholder have to do with their bond if they decided to cash it in early?

2. The board was ultimately responsible for any _______'s performance in the companies they held.

3. Buffett's criteria measured _________ expectations of the highest after-tax returns to maximize net worth in the long run.

4. Buffett's wealth was solely in _________ stock, investing and reinvesting dividends on its proportional increase per share market value over time.

5. How much profit did the new holding of Berkshire make for Buffett and Munger?

(see the answer keys)

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