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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. How many owner-related business principles were listed in this section of the book by Buffett?
(a) 14.
(b) 7.
(c) 10.
(d) 25.

2. Preferred firms must pay returns above ______ investments and be compatible with management.
(a) Mr. Market.
(b) Future.
(c) Past.
(d) Fixed-income.

3. Keynes stated: "The right method of investment is to put fairly large sums of money into enterprises which one thinks one knows something about and in the ________ of which one thoroughly believes."
(a) Intrinsic value.
(b) Philosophy.
(c) Product.
(d) Management.

4. On the other hand, a zero bond may not require _________, but can be satisfied with pay in kind bonds.
(a) Cashouts.
(b) Legal help.
(c) Papers.
(d) Interest payments.

5. Berkshire's long-term investment strategy to buy and to hold _______ for the long term was something that was comfortable to them.
(a) Stockholders.
(b) Decisions.
(c) Buildings.
(d) Investments.

Short Answer Questions

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

2. How much profit did the new holding of Berkshire make for Buffett and Munger?

3. A CEO unlikely to dispose of his successful operating business may sell profitable stock investments to redeploy _________.

4. The long-term economic goal was to maximize per-share average annual rate of gain at ______% of the intrinsic business value.

5. What were the name of the bonds that were issued during WWI?

Short Essay Questions

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

2. What did Berkshire Hathaway become in the 1990s after its humble beginnings in the years before?

3. What was listed as the difference between a fallen angel and a junk bond?

4. What was the concept of fallen angels, according to Buffett's lessons about investing?

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

6. What did Buffett and Munger prefer to do when they invested in a company?

7. 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?

8. Who was Mr. Market and where did Mr. Market come from, according to the book?

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

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

(see the answer keys)

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