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This quiz consists of 5 multiple choice and 5 short answer questions through Accounting and Valuation.

Multiple Choice Questions

1. Inventory was carried at _______ value to minimize any loss from accounting adjustments in addition to other satirical accounting action.
(a) $1.
(b) $20.
(c) $10.
(d) $99.

2. What is NOT one of the three excuses often given by an overpaying buyer, according to the book?
(a) Buyer's stock is undervalued.
(b) Will be worth less in the future.
(c) Will be worth more in the future.
(d) The buyer must grow.

3. On the other hand, a zero bond may not require _________, but can be satisfied with pay in kind bonds.
(a) Legal help.
(b) Cashouts.
(c) Interest payments.
(d) Papers.

4. Risk ___________ was defined as the pursuit of profits from anticipated events, according to the book.
(a) Arbitrage.
(b) Movement.
(c) Investing.
(d) Memories.

5. What was the total look through earnings of Berkshire in 1990, plus non-dividend operating earnings?
(a) $400M.
(b) $590M.
(c) $100B.
(d) $200B.

Short Answer Questions

1. What were the name of the bonds that Buffett seeks to promote through Berkshire?

2. Value came from a fixed-income feature to set minimum value with __________ as a bonus.

3. Buffett and Munger described the acquisition process as being akin to finding a ________.

4. Buffett and Munger invested based on company operating results and not on ____________.

5. Owners were expected to conclude that retained _______ were better left in the corporation for reinvestment at a higher rate than paid out as dividends.

(see the answer key)

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