1
Q
Four common elements of a financial crisis
A
Excessive investment in an asset class
Easy financing usually involved
Government bailout needed
It will happen again in 5-10 yrs
2
Q
The riskier the debt the higher the
A
Interest rates
3
Q
What is the price of BRK.A stock
A
300,000
4
Q
The primary business of warren buffets Berkshire Hathaway
A
Insurance
5
Q
Warren buffet prefers what 5 things in companies
A
Prefers companies to stocks Management act like owners Moats-barriers to entry No tech companies Generators of cash flow
6
Q
Financial metrics used by buffet
A
Percentage profit margins (10% higher)
ROE
7
Q
A basic truth law or assumption is
A
The principles of democracy
8
Q
Dividends are paid on a
A
Quarterly basis
9
Q
The mean of a stock tells you the
A
Rate of return
10
Q
Standard deviation measures what
A
Risk
11
Q
Lowest to highest expected return of asset class
A
Treasury bills Government bonds Corporate bonds Large company stock Small company stock
Finance Exam 1
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