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

Multiple Choice Questions

1. Susie's absence made life:
(a) game Warren more freedom.
(b) difficult for Warren.
(c) made Warren happier.
(d) made Warren more self-sufficient.

2. Buffett's new worth was approximately:
(a) $1.35 billion.
(b) $2.3 billion.
(c) $900 million.
(d) $3.8 billion.

3. Which of the following was not one of the permanent three in Berkshire's portfolio?
(a) Washington Post.
(b) IBM.
(c) GEICO.
(d) Cap Cities.

4. Warren's philosophy for purchasing stocks included all but:
(a) decent stock price.
(b) anticipation of short-term price movements.
(c) favorable long-term prospects.
(d) honest and competent management.

5. Why did US Air lose money after Buffett's investment?
(a) none of the above.
(b) their fleet was old.
(c) there was a strike.
(d) the outbreak of the Persian Gulf War.

6. In the 1980-84 period, insurance companies:
(a) cut premiums trying to maintain market share.
(b) stopped paying claims.
(c) stopped accepting new business.
(d) none of the above.

7. Buffett's role in protecting certain CEOs from takeovers was referred to as:
(a) whitemail.
(b) redmail.
(c) greenmail.
(d) blackmail.

8. Buffett differed from other CEOs in that he:
(a) he did most of his work at home.
(b) he did not have an office.
(c) did not have a structured appointments schedule.
(d) he hired a variety of secretaries.

9. What did Buffett always look at, especially in insurance?
(a) profit.
(b) growth potential.
(c) premiums.
(d) odds.

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

11. The Nebraska Furniture Mart was owned by:
(a) Katherine Graham.
(b) Rose Blumkin.
(c) Seabury Stanton.
(d) Isadore Blumkin.

12. The settlement of the public and private cases cost Salomon:
(a) $400 million.
(b) $490 million.
(c) $45 million.
(d) $125 million.

13. One thing that Buffett did that resulted in many people leaving the firm was to:
(a) give raises to maintain morale.
(b) move to a smaller building.
(c) lower the bonuses.
(d) cancel vacations.

14. Buffett's theory of trading is based on:
(a) Efficient Market Theory.
(b) Accurate price forecasts.
(c) Graham and Dodds.
(d) Randon Walk.

15. The Efficient Market Theory says that:
(a) prices reflect information.
(b) prices can be influenced.
(c) stock prices will rise.
(d) stock prices will fall.

Short Answer Questions

1. When Gutfreund resigned:

2. Buffett's annual shareholders meetings differed from those of other companies because:

3. If Buffett made a loan to one of his children:

4. The Treasure sells bonds to:

5. Buffett's Graham group, his inner circle, met:

(see the answer keys)

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