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

Multiple Choice Questions

1. _________ can be foolish, according to the lessons in this chapter, foolhardy even, or just be fooling buyers and sellers.
(a) Mr. Market.
(b) Mr. Big.
(c) Smith.
(d) Buffett.

2. What was the name of the bond holdings that Buffett added to Berkshire in 1989?
(a) General Mills.
(b) Arrowhead.
(c) Pepsi.
(d) RJR Nabisco.

3. ________ earnings were the reporting of income of one company that owns another.
(a) Look through.
(b) Fixed.
(c) Variant.
(d) Truthful.

4. ___________ were used to pay salaries and wages, which eliminated payroll with increased employee compensation.
(a) Valued shares.
(b) Option warrants.
(c) Common stocks.
(d) Increased notes.

5. What did Berkshire do in the case of the zero-coupon bonds? They deducted ______ with no cash paid out.
(a) Value.
(b) Shares.
(c) Interest.
(d) Length of time to cash it out.

Short Answer Questions

1. LBO operators benefitted from the use of ________ to reshuffle business, risk little of their own money to gain high fees, etc.

2. What was NOT one of the elements listed in the elements of arbitrage in the book?

3. Buffett and Munger did not operate a strategic plan for __________ but compare opportunities against passive investments.

4. Which business did Munger and Buffett decide to close, despite their best efforts?

5. The $70B enterprise that Buffett and his partner buy includes GEICO and ________ corporation.

(see the answer key)

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