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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. Information helped investors see the likelihood of a company meeting future __________.
(a) Promises.
(b) Obligations.
(c) Mergers.
(d) Stock prices.

2. _______ transactions only allowed stock be paid compared to a purchase in which cash or stock and cash or other valuable consideration may be paid.
(a) Moving.
(b) Dripping.
(c) Pooling.
(d) Static.

3. Major business activities grouped together aided _____ by providing data in a more useful form.
(a) Stock prices.
(b) Investments.
(c) Analysis.
(d) Future goal setting.

4. What was the piece of advice that Buffett took to heart from the athlete?
(a) Perfect makes practice.
(b) Practice makes permitted.
(c) Practice makes permanent.
(d) Practice makes perfect.

5. Buffett and Munger described the acquisition process as being akin to finding a ________.
(a) Promised land.
(b) Spouse.
(c) New toy.
(d) Gold mine.

Short Answer Questions

1. Any new investment must use a lot of large amounts of _________, according to the book.

2. Berkshire is too well developed and managed to add intrinsic business value with new ___________ paid for with common stock.

3. Buffett followed the simple rule that the same amount of intrinsic business value must be exchanged with each ________ transaction.

4. Many ended up taking Buffett and Munger ________ on faith because of the way that they reported.

5. The satire talked about charging off ________ value to negative one million dollars so the company could convert depreciation cost to annual appreciation gain.

Short Essay Questions

1. What could Berkshire shareholders be assured of, according to Buffett in the book?

2. What was the simple rule that Buffett followed when it came to exchange of stock during a merger?

3. 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?

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

5. What threatened the global competitiveness of major American industries, according to the book?

6. What was the first step in the US Steel fictional accounting process?

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

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

9. Why would a company want to repurchase their own shares, according to Buffett?

10. What was the benefit of major business activities being grouped together?

(see the answer keys)

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