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

Multiple Choice Questions

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

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

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

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

5. The question of an exchange of stock arose in 1983 during the merger of Berkshire and ____________.
(a) Blue Chip.
(b) Coca-Cola.
(c) Blue Note.
(d) Wal-Mart.

6. What was the total look through earnings of Berkshire in 1990, plus non-dividend operating earnings?
(a) $400M.
(b) $200B.
(c) $100B.
(d) $590M.

7. _______ 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) Pooling.
(c) Moving.
(d) Dripping.

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

9. The benefits of __________ were retained by Berkshire since it was a strong franchise.
(a) Reporting.
(b) Shareholder meetings.
(c) Tax reduction.
(d) Fair market value.

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

11. Buffett and Munger believed that marketability and __________ were two terms that increased the likelihood of turnover.
(a) Liquidity.
(b) Stability.
(c) Fluidity.
(d) Possibility.

12. Buffett and Munger recapitalize into Class A and _____ non-voting shares to offer a lower trading price.
(a) E.
(b) C.
(c) D.
(d) B.

13. What kind of pro told Buffett the piece of information that helped to guide them on the field?
(a) Soccer.
(b) Football.
(c) Golf.
(d) Baseball.

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

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

Short Answer Questions

1. Buffett proposed that earnings should be retained to the extent each retained dollar creates at least ________ of market value for owners.

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

3. Buffett realized that it was helpful to be _________ when others were fearful in the market.

4. If the buyer's stock was sold at less than intrinsic value, he bought with undervalued _________ and would suffer an unequal exchange.

5. Whose approach did other companies try to use in order to emulate Berkshire?

(see the answer keys)

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