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

Multiple Choice Questions

1. Owners were expected to conclude that retained _______ were better left in the corporation for reinvestment at a higher rate than paid out as dividends.
(a) Shares.
(b) Earnings.
(c) Values.
(d) Losses.

2. Berkshire shareholders can be assured that the company _______ statements are accurate.
(a) Honor.
(b) Financial.
(c) Recommended.
(d) Holding.

3. _______ 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) Static.
(b) Dripping.
(c) Moving.
(d) Pooling.

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

5. Berkshire management's goal was to acquire and to retain high quality __________.
(a) Shareholders.
(b) Management.
(c) Workers.
(d) marketability.

6. Buffett started to buy _____ businesses at good prices instead of buying good businesses at fair prices.
(a) Fair.
(b) Valuable.
(c) Good.
(d) True.

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

8. ___________ were used to pay salaries and wages, which eliminated payroll with increased employee compensation.
(a) Option warrants.
(b) Valued shares.
(c) Increased notes.
(d) Common stocks.

9. Berkshire is too well developed and managed to add intrinsic business value with new ___________ paid for with common stock.
(a) Notes.
(b) Selloffs.
(c) Bonds.
(d) Acquisitions.

10. Buffett admitted that issuing ________ in mergers cost shareholders money, according to the book.
(a) Bills.
(b) Announcements.
(c) Stock.
(d) Bonds.

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

12. Buffett preferred to trade a narrow range around _________ business value to favor long-term owners.
(a) Promised.
(b) Market.
(c) Guesstimated.
(d) Intrinsic.

13. How many shareholders did a business that wanted to be on the NYSE have to have?
(a) 2000.
(b) 5000.
(c) 10,000.
(d) 100.

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

15. Buffett made distinctions in ________ policy to account or differences in earnings, according to the book.
(a) Ownership.
(b) Share.
(c) Market.
(d) Dividend.

Short Answer Questions

1. What is NOT one of the three excuses often given by an overpaying buyer, according to the book?

2. The NYSE listing for Berkshire was thought to reduce _______ for shareholders by ensuring a narrow market maker spread.

3. In 1992, what did the Berkshire per share stock price increase past?

4. Pooling overcame the deficiency of ____________ amortization in a merger, which was really a purchase.

5. The question of an exchange of stock arose in 1983 during the merger of Berkshire and ____________.

(see the answer keys)

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