Chapter 1

A Five-Sigma Event

THE WORLD’S GREATEST INVESTOR

Multiple-Choice Questions

1. Which of the following factors contribute(s) to the growth of Berkshire Hathaway?

I. Earnings generated by wholly owned businesses

II. Fees earned from investment consulting business

III. Price appreciation of stock portfolio

A. I only

B. I and II

C. I and III

D. I, II, and III

2. Which of the following questions would an investor or purchaser of a business need to ask before investing in a company?

I. How much capital reinvestment is required to keep a company running?

II. What is the debt obligation of the company?

III. What is the track record of management?

IV. What sort of vision does management have for the future?

A. I and II only

B. II and III only

C. I, II, and IV only

D. I, II, III, and IV

3. Which of the following statements correspond(s) with Warren Buffett’s investment philosophy?

I. There should be no difference between the approach a business owner takes and the approach a purchaser of shares takes when considering an investment.

II. Special consideration should be given to a company’s competitors before investing in or buying the company.

III. When considering purchasing common stock in a company, an opinion regarding the overall stock market should come into play.

A. I only

B. I and II

C. II and III

D. I, II, and III

4. Which of the following is/are a characteristic of an investor in a company’s stock that differentiates the investor from an owner of a business?

I. Investors ...

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