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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. Berkshire kept the business operating after the acquisition, since it would already have successful ___________.

2. Generally, earnings were reported when classified by a company as more than _______ owned.

3. A company might consider repurchasing _______ when it has available funds that are above long-term needs.

4. All acquisition considerations were paid for in ________, according to the book's information.

5. Non-transferability of _______ did not make them less costly to an employer, according to the book.

Short Essay Questions

1. Why did many executives argue about the costs of stock options and why they should be ignored?

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

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

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

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

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

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

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

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

10. 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?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Buffett didn't like to invest in banking because of the leverage involved. Banks were too difficult as investments most of the time.

Part 1: Do you think that banks can be good investment choices?

Part 2: Why do you think it might be better to stay away from banks as investments?

Part 3: How do you think a bank might become a better investment for a larger company?

Essay Topic 2

Buffett and Munger supported acquiring firms only when the added intrinsic value to their market shares.

Part 1: Why do you think Buffett and Munger only wanted to acquire firms that added value?

Part 2: Do you think modern day companies limit the types of companies they acquire?

Part 3: How do you think Berkshire Hathaway might be been different had they simply bought any company that was up for sale?

Essay Topic 3

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?

(see the answer keys)

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