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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. What was the one thing that Munger and Buffett would not address in their question sessions?

2. Popular theory at the time said that the market was totally efficient at _________ investment.

3. What did the zero-coupon bonds not pay to the investor in the end?

4. Many stocks had a _______, like Coca-Cola, but none have the same market share.

5. Buffett is proud that ____% of the shares outstanding at the end of each year were held by the same shareholders.

Short Essay Questions

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

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

3. What did Buffett and Munger invest based upon, instead of price quotes?

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

5. What might a CEO do if they were unlikely to dispose of their successful operating business, according to Buffett?

6. Where did Berkshire directors have most of their net worth invested, according to the book?

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

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

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

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

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Buffett and Munger stated at several points that buying things at a fair price is a reasonable action to take.

Part 1: Do you think there is such a thing as a fair price?

Part 2: Who should be in charge of determining what a fair price might be?

Part 3: How do you determine what a fair price for an item or a service might be?

Essay Topic 2

In order to buy bonds and stock in a company, Buffett and Munger required that companies have a firm management style.

Part 1: How might you define the idea of a firm management style?

Part 2: What are some modern companies today that have a good management approach?

Part 3: Do you think a company can be a success without a strong management team?

Essay Topic 3

Buffett and Munger thought it was better to monitor management as an investment strategy.

Part 1: How does management impact the way that a company works?

Part 2: Do you think management can be something that predicts financial stability?

Part 3: Why do you think Munger and Buffett looked at management to determine their investments?

(see the answer keys)

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