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

Multiple Choice Questions

1. Risk ___________ was defined as the pursuit of profits from anticipated events, according to the book.
(a) Movement.
(b) Arbitrage.
(c) Memories.
(d) Investing.

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

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

4. The partners considered a lesser interest if the ________ price was less than what it would be for 100%.
(a) Pro-management.
(b) Pro-rata.
(c) Pro-biotic.
(d) Pro-rate.

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

6. How many primary holdings were permanent in the time of Buffett and Munger?
(a) Four.
(b) One.
(c) Two.
(d) Three.

7. Buffett and Munger both opposed any selective ________ and predictive growth rates from the CEOs who reported them.
(a) Truth.
(b) Strategies.
(c) Disclosure.
(d) Purchases.

8. _________ can be foolish, according to the lessons in this chapter, foolhardy even, or just be fooling buyers and sellers.
(a) Mr. Market.
(b) Buffett.
(c) Mr. Big.
(d) Smith.

9. Berkshire Hathaway's insurance companies maintained how many permanent common stock holdings?
(a) Five.
(b) Ten.
(c) Four.
(d) Three.

10. What were the name of the bonds that Buffett seeks to promote through Berkshire?
(a) Junk.
(b) None.
(c) Zero-coupon.
(d) Angel.

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

12. Buffett and Munger also followed the idea of minimal use of _______ and leverage, helping to create solid investments.
(a) Divestment.
(b) Consolidation.
(c) Recovery.
(d) Debt.

13. Berkshire's board included a controlling ________, in which other board members could persuade others to make changes.
(a) Outsider.
(b) Owner.
(c) Competitor.
(d) Shareholder.

14. On the other hand, a zero bond may not require _________, but can be satisfied with pay in kind bonds.
(a) Cashouts.
(b) Interest payments.
(c) Papers.
(d) Legal help.

15. A __________ was something that Buffett and Munger believed was valuable to inform businesses owners of the year's business growth.
(a) Business report.
(b) Business gathering.
(c) Business trade show.
(d) Business forum.

Short Answer Questions

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

2. Buffett dismissed risk in his choices with his notion that falling __________ prices present an opportunity to buy.

3. Which state was Buffett worried about in terms of its ability to create good investments for his company?

4. _________ were often unwilling to discuss the business issues during meetings.

5. How much was the company worth that Buffett and his partner created at the time of this book?

(see the answer keys)

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