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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. What kind of pro told Buffett the piece of information that helped to guide them on the field?

2. In 1992, what did the Berkshire per share stock price increase past?

3. Inventory was carried at _______ value to minimize any loss from accounting adjustments in addition to other satirical accounting action.

4. _________ was spurious, to Buffett, compared to depreciation charges for deteriorating assets.

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

Short Essay Questions

1. How did Buffett avoid diluting share value to existing shareholders?

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

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. What were the two super contagious diseases that could spread in the investment community?

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

6. What was the expected benefit for the Berkshire NYSE listing, according to the book?

7. What was the difference between the purchase and the pooling transaction?

8. What were the two categories of most interest for Munger and Buffett when they wanted to add to their holdings?

9. What did Buffett expect to owners of stock to do when he creates a principle that earnings should be retained to the extent each retained dollar creates at least one dollar of market value for owners?

10. What happened as the result of the fictional accounting actions by US Steel?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Mr. Market was a fun character made up by Graham to teach marketing principles.

Part 1: Why do you think Mr. Market is a good representation of the modern day investor?

Part 2: Do you think Mr. Market is the same today as he was at the time of Graham's teachings?

Part 3: How might you compare Mr. Market to yourself in terms of how you would approach investing and financial decisions?

Essay Topic 2

Buffett and Munger saw the shareholders are partners in the company, not just as those who bought into the company.

Part 1: Do you think all shareholders should be seen as partners in their companies?

Part 2: How can a shareholder influence the way that that a company behaves or reacts in the business market?

Part 3: Why do you think it's necessary for there to be shareholders in modern day companies?

Essay Topic 3

In order to buy bonds and stock in a company, Buffett and Munger required that companies have a firm management style.

Part 1: How might you define the idea of a firm management style?

Part 2: What are some modern companies today that have a good management approach?

Part 3: Do you think a company can be a success without a strong management team?

(see the answer keys)

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