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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 and Munger were often asked to ________ under the assumption it would benefit shareholders, but they disagree.
(a) Sell stock.
(b) Keep stock.
(c) Split stock.
(d) Buy more holdings.

2. Generally, earnings were reported when classified by a company as more than _______ owned.
(a) 25%.
(b) 99%.
(c) 50%.
(d) 10%.

3. All acquisition considerations were paid for in ________, according to the book's information.
(a) Trades.
(b) Stocks.
(c) Cash.
(d) Handshakes.

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

5. Any new investment must use a lot of large amounts of _________, according to the book.
(a) Meetings.
(b) Management.
(c) Energy.
(d) Capital.

Short Answer Questions

1. In the past, the distinction between economic and accounting goodwill was insignificant when Buffett sought firms with tangible _______, rather than firms relying on economic goodwill.

2. What did GAAP stand for, according to the text in the book?

3. While Munger and Buffett were excited when they are in the process of acquiring a new business, they were also _________.

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

5. Warrants exercised for a penny par add ________ to credit capital surplus, according to the book.

Short Essay Questions

1. What threatened the global competitiveness of major American industries, according to the book?

2. How did Buffett avoid diluting share value to existing shareholders?

3. What did Buffett want to do with the Berkshire stock on the NYSE?

4. What was the expected benefit for the Berkshire NYSE listing, according to the book?

5. What did Buffett say should happen to some earnings in dividends?

6. What were the three main thing that shareholders always knew about Munger and Buffett?

7. What was the purpose of Buffett and Munger focusing on buying up 100% of a company and the investment must use a lot of capital?

8. Despite his frustration with the GAAP, what did Buffett come to realize about accounting data?

9. What was the difference between the purchase and the pooling transaction?

10. What could Berkshire shareholders be assured of, according to Buffett in the book?

(see the answer keys)

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