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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. ___________ recognized that statements are not adequate compared to segment data that enabled control of business.

2. Buffett discussed the popularity of _________ buyouts as they had a number of different benefits to them.

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

4. Buffett wondered that if _______ were not calculated through earnings, how could they be determined.

5. Buffett stated that his position with any stock repurchase does not imply acceptance of _______, which he calls extortion.

Short Essay Questions

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

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

3. What was the piece of advice from a golf pro that Buffett takes to heart in his acquisition strategy?

4. What was the strategy that Buffett employed in order to acquire businesses, after learning the lesson from the golf pro?

5. What did Buffett prefer in trading that allowed for more benefits to long-term owners of stock?

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

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

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

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

10. What was the simple rule that Buffett followed when it came to exchange of stock during a merger?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Buffett and Munger saw the shareholders are partners in the company, not just as those who bought into the company.

Part 1: Do you think all shareholders should be seen as partners in their companies?

Part 2: How can a shareholder influence the way that that a company behaves or reacts in the business market?

Part 3: Why do you think it's necessary for there to be shareholders in modern day companies?

Essay Topic 2

Inactivity in investing was seen as intelligent investing as well, even though nothing was being done during some of these periods.

Part 1: Why might inactivity be beneficial to investing?

Part 2: Do you think inactivity or action is more helpful to an investing strategy?

Part 3: What do you think your investing approach might look like? Active or inactive? Both?

Essay Topic 3

There are some companies that Berkshire Hathaway owns that they will not sell no matter what the offered price might be.

Part 1: Why are the permanent companies so important to Berkshire Hathaway?

Part 2: What would you do if you were offered three times the value of a permanent company's price?

Part 3: Do you think it's a good idea to have permanent companies in a portfolio?

(see the answer keys)

This section contains 648 words (approx. 3 pages at 300 words per page) View a FREE sample