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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. Value came from a fixed-income feature to set minimum value with __________ as a bonus.
(a) A good economy.
(b) Conversion.
(c) A unique product.
(d) A strong management team.

2. Buffett and Munger bought _________ companies the same way they might buy private companies.
(a) Public.
(b) Corporate.
(c) Large.
(d) Small.

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

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

5. The intrinsic business value goal was reached by ________, preferably 100% ownership of diverse business firms generating cash and above-average returns on capital.
(a) Passive.
(b) Prominent.
(c) Direct.
(d) Indirect.

Short Answer Questions

1. Who was the financial mentor that Buffett relied upon for his teachings and lessons about the way to do business?

2. When did Berkshire Hathaway begin as a textile company?

3. What were the name of the bonds that Buffett seeks to promote through Berkshire?

4. Buffett criticizes __________ market theory as be does not believe it to be a truth.

5. What was the name of the company that Buffett and Munger bought in 1973?

Short Essay Questions

1. What was the key principle of Ben Graham that guided the way that Buffett bought other businesses?

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

3. What was the long-term economic goal of the directors investing in the Berkshire company?

4. What would business contraction cause, though Buffett says this was also an opportune time for investment?

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

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

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

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

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

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

(see the answer keys)

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