View a FREE sample

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

Multiple Choice Questions

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

2. The different classes of stock allow _______ investors to still have value for the money they can spend.
(a) Large.
(b) Small.
(c) Short-term.
(d) Long-term.

3. The common stock par value was reduced to _________, according to the book.
(a) One dime.
(b) One dollar.
(c) One quarter.
(d) One cent.

4. The NYSE listing for Berkshire was thought to reduce _______ for shareholders by ensuring a narrow market maker spread.
(a) Transaction costs.
(b) Instability.
(c) Price of stock.
(d) Variance.

5. Whose approach did other companies try to use in order to emulate Berkshire?
(a) Smith.
(b) Graham.
(c) Mulder.
(d) Munder.

6. ________ cannot outperform business indefinitely because earnings on stock investments were reduced by the amount of transaction and investment management costs.
(a) Holdings.
(b) Treasury bills.
(c) Bonds.
(d) Stocks.

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

8. Buffett and Munger described the acquisition process as being akin to finding a ________.
(a) Promised land.
(b) New toy.
(c) Spouse.
(d) Gold mine.

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

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

11. What was NOT one of the three tax-free gifting tactics that Buffett suggested to shareholders?
(a) Will gifting.
(b) Bargain sale.
(c) Partnership form.
(d) Married couple gifting.

12. What was the piece of advice that Buffett took to heart from the athlete?
(a) Practice makes perfect.
(b) Perfect makes practice.
(c) Practice makes permitted.
(d) Practice makes permanent.

13. The partners were committed to providing and presenting a _______ business and ownership philosophy.
(a) Consistent.
(b) Active.
(c) Powerful.
(d) Long-term.

14. ________ took fictional accounting actions that showed absurd accounting manipulations to let it undersell all competition to dominate the industry.
(a) Pepsi.
(b) US Steel.
(c) Coca-Cola.
(d) GEICO.

15. Buffett and Munger run the business so that all ___________ gain proportionately.
(a) Companies.
(b) Shareholders.
(c) Banks.
(d) Lending agencies.

Short Answer Questions

1. The goal of the partners was to maximize the real economic benefits, not just the number of ___________.

2. Berkshire's consolidated statements met outside __________, according to the book.

3. Berkshire management's goal was to acquire and to retain high quality __________.

4. A purchased firm might have _______ that increases in value over time by the amount of inflation and successful operating results.

5. Berkshire shareholders can be assured that the company _______ statements are accurate.

(see the answer keys)

This section contains 435 words (approx. 2 pages at 300 words per page) View a FREE sample