View a FREE sample

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

Short Answer Questions

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

2. If the buyer's stock was sold at less than intrinsic value, he bought with undervalued _________ and would suffer an unequal exchange.

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

4. Buffett and Munger now believed that the substantial economic _________ far exceeded the book value of Berkshire.

5. Many executives argued that the costs of _________ should be ignored because they were hard to value or may harm smaller firms.

Short Essay Questions

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

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

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

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

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

6. What was the first step in the US Steel fictional accounting process?

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

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

9. 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?

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

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Buffett stated that he finds some annual meetings to be useless to those who attend them and to those who run them.

Part 1: Do you think there is value in the annual meetings?

Part 2: Why do you think Buffett believes the annual meetings to be fairly useless?

Part 3: What do you think could be done in order to make annual meetings more useful to those who attend?

Essay Topic 2

Buffett decided to buy a company when their stock market value was less than their intrinsic value.

Part 1: Do you think Buffett should pay the intrinsic value or the stock market value?

Part 2: Why do you think a company might be worth less in the market than they are intrinsically?

Part 3: How do you think Buffett might approach a conversation about buying a company that has a lower market value?

Essay Topic 3

Warren Buffett appeared to be a mild-mannered and modest person, unlike so many others in the financial market.

Part 1: Do you think that Buffett is the exception the rule that those with money are self-serving?

Part 2: Why do you think Buffett maintained the manner he did?

Part 3: How do you think Buffett is able to maintain his modest manner during his time at Berkshire Hathaway?

(see the answer keys)

This section contains 690 words (approx. 3 pages at 300 words per page) View a FREE sample