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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. If Buffett made a loan to one of his children:
(a) they had to sign a loan agreement.
(b) he refused to help them.
(c) they were afraid to ask.
(d) he would berate them for needing money.

2. Berkshire was most active in:
(a) business insurance.
(b) door to door policy selling.
(c) reinsurance.
(d) promoting auto insurance.

3. Buffet's view of stock index futures was:
(a) they would lead to excess speculation.
(b) they should be abandoned.
(c) they would benefit the market.
(d) he relied on them.

4. Capital Cities was a:
(a) big cable, broadcasting and publishing company.
(b) heavy equipment company.
(c) clothing company.
(d) real estate company.

5. By the 1990s, Buffett was worth:
(a) $250 million.
(b) $1 billion.
(c) $620 million.
(d) $500 million.

6. What term is used to denote risk?
(a) beta.
(b) theta.
(c) gamma.
(d) alpha.

7. The Treasure sells bonds to:
(a) the Fed.
(b) the public.
(c) banks only.
(d) the highest bidder.

8. What stock did Buffett begin to buy in the fall of 1988?
(a) Pepsi-Cola.
(b) NBC.
(c) Coca-Cola.
(d) ABC.

9. Buffett's annual shareholders meetings differed from those of other companies because:
(a) he refused to hold shareholder meetings.
(b) he wouldn't attend his.
(c) his were elegantly catered.
(d) his were well attended.

10. The Efficient Market Theory was popular because it:
(a) was based on technology.
(b) was simple.
(c) proved accurate.
(d) extended the theories of Adam Smith to financial markets.

11. How much did Buffett pay for Nebraska Furniture Mart?
(a) $10 million.
(b) $5 million.
(c) $25 million.
(d) $60 million.

12. Regarding his textile mills, in the early 1980s, Buffett:
(a) sold them.
(b) made large capital investments.
(c) closed them.
(d) continued to operate at a loss.

13. By the end of 1988, the Berkshire share price was approximately?
(a) $2,500.
(b) $8,000.
(c) $5,500.
(d) $1,000.

14. How long did Buffett go without buying any common stock after the Cap Cities deal in 1985?
(a) six months.
(b) three years.
(c) one year.
(d) eighteen months.

15. Which of the following was not a reason why Warren didn't move to Southern California?
(a) he would have to change his routine.
(b) he didn't want to leave the familiarity of Omaha.
(c) his anger at Susie.
(d) he would have to leave his long-time secretary.

Short Answer Questions

1. Buffett looked for stocks:

2. Which of the following is not part of Buffett's guide to selecting stocks?

3. Why did Buffett refuse to financially support his adult children?

4. One thing that Buffett did that resulted in many people leaving the firm was to:

5. Who does Buffett select to run Salomon?

(see the answer keys)

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