Investment (Warren Buffet Questions and Answers) 4

Question 1

Buffett won a famous 10-year bet that an S&P 500 index fund would beat a basket of:

Accepted Answer

hedge funds

Answer

Buffett bet in 2007 that an index fund would outperform hedge funds over ten years, and he won.

Question 2

Buffett describes the stock market as a device for transferring money from the impatient to the:

Accepted Answer

patient

Answer

Buffett stresses that patience rewards long-term investors.

Question 3

Rule No. 1 in Buffett's investing philosophy is:

Accepted Answer

Never lose money

Answer

Buffett's Rule No. 1 is never lose money, and Rule No. 2 is never forget Rule No. 1.

Question 4

Buffett says price is what you pay; ___ is what you get.

Accepted Answer

value

Answer

This quote highlights the distinction between market price and intrinsic value.

Question 5

Buffett's preferred measure of a business's worth, based on future cash flows, is its:

Accepted Answer

intrinsic value

Answer

Buffett buys when market price is below his estimate of intrinsic value.

Investment Practice Test