The Warren Buffett Way Workbook

Chapter 2

The Education of Warren Buffett

Multiple-Choice Questions

1. Which of the following are considered Benjamin Graham’s most celebrated works?

I. Security Analysis

II. Investment Valuation

III. The Intelligent Investor

A. I and II

B. I and III

C. II and III

D. I, II, and III

2. The first edition of Security Analysis dedicated significant attention to what issue?

A. Overvaluation in the markets

B. Short-term trading abuses

C. Corporate abuses

D. Stockholder voting rights

3. What sentence sums up the essence of Security Analysis?

A. A well-chosen diversified portfolio of common stocks, based on reasonable prices, can be a sound investment.

B. Purchasing stocks as if an investor is going to become an owner of a company is a key to investing success.

C. Investors should focus on cash flow and dividend growth when considering purchasing a stock.

D. Patience in investing until stocks appear undervalued will result in superior investment returns.

4. According to Benjamin Graham, which of the following is the definition of an investment?

A. An investment is based on the intent to make a profit.

B. Borrowing money to leverage business operations and returns is an investment.

C. Investing is centered on diversification of a portfolio.

D. An investment operation is one that, upon thorough analysis, promises safety of principal and a satisfactory return.

5. According to Benjamin Graham, investment analysis is a process of which of the following steps?

A. Analytical, subjective, and ...