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

Multiple Choice Questions

1. Businesses must recognize present value _______ for post-retirement health benefits, according to Buffett.
(a) Concerns.
(b) Charts.
(c) Liability.
(d) Reporting.

2. During what year were the Berkshire shares to be traded on the New York Stock Exchange?
(a) 1988.
(b) 1975.
(c) 1999.
(d) 1986.

3. Buffett and Munger continue to offer _______ for value trade in the acquisition process, as it seems fair to all parties.
(a) Truth.
(b) Choice.
(c) Value.
(d) Benefit.

4. The goal of the partners was to maximize the real economic benefits, not just the number of ___________.
(a) Shares.
(b) Checks.
(c) Properties.
(d) Enterprises.

5. _______ transactions only allowed stock be paid compared to a purchase in which cash or stock and cash or other valuable consideration may be paid.
(a) Pooling.
(b) Static.
(c) Moving.
(d) Dripping.

6. Some CEOs think that manipulating __________ could encourage the highest stock price available.
(a) Mergers.
(b) Reports.
(c) Earnings.
(d) Portfolios.

7. Buffett believed that _______ data was important to his and Munger's decision making.
(a) Stock.
(b) Accounting.
(c) Business.
(d) Investor.

8. What did GAAP stand for, according to the text in the book?
(a) Generally accepted accounting principles.
(b) Generally argued accounting principles.
(c) Generally agreed accounting principles.
(d) Generally accepted available principles.

9. What is NOT one of the three excuses often given by an overpaying buyer, according to the book?
(a) Buyer's stock is undervalued.
(b) Will be worth less in the future.
(c) The buyer must grow.
(d) Will be worth more in the future.

10. Buffett discussed the popularity of _________ buyouts as they had a number of different benefits to them.
(a) Discussed.
(b) Bored.
(c) Averaged.
(d) Leveraged.

11. Buffett realized that it was helpful to be _________ when others were fearful in the market.
(a) Standoffish.
(b) Slow.
(c) Greedy.
(d) Fast.

12. A stock _______ might attractive investors unlike their current investor group which might downgrade the quality of the shares.
(a) Sale.
(b) Selloff.
(c) Split.
(d) Option.

13. The partners were interested firms that are adapted to ______ times that could readily increase prices and scale up to a large volume with more capital.
(a) Inflationary.
(b) Recession.
(c) Bloated.
(d) Aggressive.

14. The Berkshire dividend share of Coca-Cola in 1990 included operating earnings of ___________.
(a) $125M.
(b) $500M.
(c) $100M.
(d) $250M.

15. Warrants exercised for a penny par add ________ to credit capital surplus, according to the book.
(a) $39.99
(b) $29.99.
(c) $49.99
(d) $19.99.

Short Answer Questions

1. Buffett and Munger described the acquisition process as being akin to finding a ________.

2. Buffett preferred to trade a narrow range around _________ business value to favor long-term owners.

3. ________ took fictional accounting actions that showed absurd accounting manipulations to let it undersell all competition to dominate the industry.

4. Generally, earnings were reported when classified by a company as more than _______ owned.

5. Buffett followed the simple rule that the same amount of intrinsic business value must be exchanged with each ________ transaction.

(see the answer keys)

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