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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. Buffett did not expand, borrow, or sell unless Berkshire received as much _________ as it gave.
(a) Dividends.
(b) Power.
(c) Value.
(d) Promise.

2. Buffett criticizes __________ market theory as be does not believe it to be a truth.
(a) Efficient.
(b) Eradicant.
(c) Effective.
(d) Erasing.

3. Most Berkshire _______ had their net worth invested primarily in the company.
(a) Secretaries.
(b) Workers.
(c) Shareholders.
(d) Directors.

4. Alternative investments were considered for __________ high quality investments when a preferable business could not be located.
(a) Long-term.
(b) Short-term.
(c) Basic.
(d) Future.

5. What were the name of the bonds that were issued during WWI?
(a) Series II.
(b) Series E.
(c) IRA.
(d) Series B.

Short Answer Questions

1. Confusing ________ requirements were offset by the partners' willingness to report look-through earnings.

2. What did Berkshire do in the case of the zero-coupon bonds? They deducted ______ with no cash paid out.

3. In some cases, the benefits of partial ownership earnings may far outweigh the ________ acquisition cost.

4. Buffett and his partner preferred to buy a company at a fair price at _______% interest.

5. Buffett's long term economic goal was to maximize per share _________ value of Berkshire stock by owning a diversified group of businesses.

Short Essay Questions

1. What were two of the benefits of zero-coupon bonds, as listed by Berkshire in their promotions?

2. What was the definition of the idea of risk arbitrage, according to the book?

3. What might a CEO do if they were unlikely to dispose of their successful operating business, according to Buffett?

4. What was the purpose of the fourteen owner-related business principles that Buffett lists in the book?

5. What happened as a result of Buffett and Munger buying their holding companies at a fair rate or buying lesser interest in at the pro-rata price?

6. Whose investing principles guided the Buffett purchase of Washington Post Company?

7. What were the five different categories from which Buffett can select his investments?

8. What did Buffett fear about investing in companies that were located in California?

9. How did Buffett begin to promote the zero-coupon bonds from Berkshire, though it was complicated to do so?

10. What did Buffett decide to do in order to create a meeting in which business owners would be informed about the year's business growth and development?

(see the answer keys)

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