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

Multiple Choice Questions

1. What were the name of the bonds that were issued during WWI?
(a) Series II.
(b) IRA.
(c) Series B.
(d) Series E.

2. What was the title of Buffett in relation to his company?
(a) Chairman.
(b) Vice-Chairman.
(c) Owner.
(d) President.

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

4. Buffett and Munger bought _________ companies the same way they might buy private companies.
(a) Large.
(b) Small.
(c) Corporate.
(d) Public.

5. Preferred stock is considered with _________ that Munger and Buffett like, admire, and trust.
(a) Values.
(b) Management.
(c) Products.
(d) History.

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

7. What did a bondholder have to do with their bond if they decided to cash it in early?
(a) Pay interest.
(b) Nothing.
(c) Earn more.
(d) Transfer it back to the owner.

8. What was coined as the term for the amount of undiscovered embezzlement?
(a) Embezzling.
(b) Bezz.
(c) Bezzle.
(d) Bonding.

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

10. How many shareholders did Munger and Buffett pledge to provide fair and simultaneous reporting to?
(a) 50%.
(b) 300,000.
(c) 15,000.
(d) 10.

11. Substantial equity interest was NOT owned by one of the following companies.
(a) Coca-Cola.
(b) Gillette.
(c) American Express.
(d) GEICO.

12. What was the name of the bank that had substantial equity interest in Berkshire?
(a) Chase.
(b) Fifth Third.
(c) Wells Fargo.
(d) Bank of America.

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

14. Buffett and Munger promised to provide sufficient additional _______ to evaluate true results.
(a) Information.
(b) Funding.
(c) Research.
(d) Shareholders.

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

Short Answer Questions

1. Buffett claimed in the book that most Berkshire shareholders will hang onto their shares for ____________.

2. What was the name of Warren Buffett's partner in the company they shared?

3. What company did Buffett acquire in 1964, which he eventually grew into a large holding company?

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

5. When did Berkshire Hathaway begin as a textile company?

(see the answer keys)

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