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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. What did a bondholder have to do with their bond if they decided to cash it in early?
(a) Pay interest.
(b) Transfer it back to the owner.
(c) Nothing.
(d) Earn more.

2. When did Berkshire Hathaway begin as a textile company?
(a) 1956.
(b) Early 1800s.
(c) Early 1900s.
(d) 1967.

3. Which of the partners had 99% of their net worth concentrated in Berkshire stock?
(a) Munger.
(b) Neither.
(c) Both.
(d) Buffett.

4. Preferred stock is considered with _________ that Munger and Buffett like, admire, and trust.
(a) History.
(b) Values.
(c) Products.
(d) Management.

5. The board was ultimately responsible for any _______'s performance in the companies they held.
(a) Market.
(b) Shareholder.
(c) Worker.
(d) CEO.

Short Answer Questions

1. Buffett claimed in the book that most Berkshire shareholders will hang onto their shares for ____________.

2. Buffett and Munger invested based on company operating results and not on ____________.

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

4. Value came from a fixed-income feature to set minimum value with __________ as a bonus.

5. How much was the company worth that Buffett and his partner created at the time of this book?

Short Essay Questions

1. How did Buffett's criteria for buying companies and maintaining holdings help to maximize net worth in the long run?

2. What is the content of this book often used for, according to the author?

3. How did Buffett seek to define a corporation as a mechanism? What exactly did this mean?

4. 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?

5. What did Buffett and Charlie Munger do together, which led to the creation of this book?

6. 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?

7. What happened as the result of Buffett following the advice of Ben Graham and David Dodd?

8. What were some of the companies included in the purchases of Berkshire Hathaway under Munger and Buffett?

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

10. What was the main problem with the idea of efficient market theory, according to Buffett?

(see the answer keys)

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