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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. Businesses must recognize present value _______ for post-retirement health benefits, according to Buffett.
(a) Reporting.
(b) Concerns.
(c) Charts.
(d) Liability.

2. ________ earnings were the reporting of income of one company that owns another.
(a) Fixed.
(b) Truthful.
(c) Look through.
(d) Variant.

3. Many ended up taking Buffett and Munger ________ on faith because of the way that they reported.
(a) Promises.
(b) Rumors.
(c) Presentations.
(d) Past values.

4. The NYSE listing for Berkshire was thought to reduce _______ for shareholders by ensuring a narrow market maker spread.
(a) Price of stock.
(b) Variance.
(c) Instability.
(d) Transaction costs.

5. Buffett and Munger recapitalize into Class A and _____ non-voting shares to offer a lower trading price.
(a) C.
(b) D.
(c) B.
(d) E.

Short Answer Questions

1. The common stock par value was reduced to _________, according to the book.

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

3. What kind of pro told Buffett the piece of information that helped to guide them on the field?

4. Options were often ______ at exercise which made them more expensive than publicly traded options.

5. Buffett and Munger believed that investors should pay attention to business results, not __________.

Short Essay Questions

1. 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?

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

3. What happened as the result of the fictional accounting actions by US Steel?

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

5. To what other experience did Buffett compare the process of acquiring a business?

6. What was done in order to minimize any loss from accounting adjustments during the US Steel transactions?

7. What were the two categories of most interest for Munger and Buffett when they wanted to add to their holdings?

8. What did Buffett try to do in order to avoid problems with the two contagious diseases in the investment community?

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

10. What question emerged during the merger between Berkshire and Blue Chip in 1983?

(see the answer keys)

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