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

Multiple Choice Questions

1. 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) Benefit.
(d) Choice.

2. _________ was spurious, to Buffett, compared to depreciation charges for deteriorating assets.
(a) Acquisition investment.
(b) Amortization.
(c) Annual reporting.
(d) Stock market value.

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

4. Berkshire kept the business operating after the acquisition, since it would already have successful ___________.
(a) Movement.
(b) Debts.
(c) Management.
(d) Practices.

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

6. Any new investment must use a lot of large amounts of _________, according to the book.
(a) Meetings.
(b) Management.
(c) Capital.
(d) Energy.

7. Many executives argued that the costs of _________ should be ignored because they were hard to value or may harm smaller firms.
(a) Reinvestment promises.
(b) Dividends.
(c) Charges.
(d) Stock options.

8. The partners were also interested in firms that had extraordinary ________ talent exhibiting skillful executive achievement.
(a) Jumps.
(b) Prices.
(c) Management.
(d) Reports.

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

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

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

12. Accounting for the purchase of a business required allocating the ________ first to the fair value of net assets.
(a) Purchase price.
(b) Stock market.
(c) Projected price.
(d) Dividends.

13. A company might consider repurchasing _______ when it has available funds that are above long-term needs.
(a) Bills.
(b) Bonds.
(c) Shares.
(d) Fallen angels.

14. Munger believed the _________ Berkshire paid to be acceptable for the benefits they received.
(a) Treasury funds.
(b) Court costs.
(c) Accounting fees.
(d) Taxes.

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

Short Answer Questions

1. While Munger and Buffett were excited when they are in the process of acquiring a new business, they were also _________.

2. Buffett and Munger recapitalize into Class A and _____ non-voting shares to offer a lower trading price.

3. Options were often ______ at exercise which made them more expensive than publicly traded options.

4. Non-transferability of _______ did not make them less costly to an employer, according to the book.

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

(see the answer keys)

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