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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. Ranieri tells Gutfreund that he is selling the [mortgage bond] technology for a _____.
(a) Pound of flesh.
(b) Stable of horses.
(c) Hill of magic beans.
(d) Good price.

2. What is another name for a call option?
(a) A shared equity.
(b) A warrant.
(c) A glue bond.
(d) A stay/

3. What book does Conni Bruck write?
(a) No Way Out.
(b) The Predator's Ball.
(c) How to Win Friends and Influence People.
(d) The Trader's Game.

4. What is the name given to the junk bond seminar that Michael Milken speaks at every year in Beverly Hills?
(a) The Predator's Ball.
(b) TheMoney Masquerade.
(c) The Golden Parachute.
(d) The Junker's Ball.

5. Drexel Burnham runs an ad in the Wall Street journal showing two men _____.
(a) Eating fast food.
(b) On a tandem bicycle.
(c) Running up a hill.
(d) At a boxing match.

6. Mark Smith enters the mortgage department in 1985 and is considered a _____ by the author.
(a) Genius.
(b) Dark horse.
(c) Spy.
(d) Mediator.

7. A sticking point in making mortgage securities work is the homeowner's right to _____ his mortgage.
(a) Sell.
(b) Prepay.
(c) Default on.
(d) Appropriate.

8. According to the author, even knowledgeable thrift presidents feel they face a choice between rape and _____ when dealing with mortgage traders.
(a) Battery.
(b) Long-term gains.
(c) Prison.
(d) Slow suicide.

9. Ranieri is the guru of the _____ industry.
(a) Dream.
(b) Restaurant.
(c) Thrift.
(d) Junk bond.

10. In New York, when a trader is starting out, the excitement of being part of the action comes at the price _____.
(a) One's sanity.
(b) One's soul.
(c) Freedom.
(d) A few million dollars.

11. By getting thrift managers to trade their bonds actively, Ranieri's sales force could transform a shy, nervous thrift president into a _____.
(a) Drug addict.
(b) Glutton for food.
(c) Screaming maniac.
(d) Maniacal gambler.

12. What is the word that means trading riskily for profit?
(a) Swapping.
(b) Arbitration.
(c) Arbitrage.
(d) Selling short.

13. What is more relevant than a bad joke because it moves markets?
(a) A documentary.
(b) A fact.
(c) A book.
(d) A rumor.

14. Steve Roth and Scott Brittenham make millions of dollars trading _____.
(a) Federal project loans.
(b) Corporate bonds.
(c) Small Business Administration loans.
(d) Junk securities.

15. What is the primary aspect of business that always matters most at Salomon Brothers?
(a) Profit.
(b) Market advantage.
(c) Loyalty.
(d) Revenue.

Short Answer Questions

1. What type of communication do the author and Dash launch into at the beginning of the work day?

2. According to one mortgage trader, it is an accepted fact that mortgage traders have _____.

3. What is the name of the standard of one hundred cents on the dollar?

4. Salomon Brothers is a ______ from 1910 to 1981.

5. What author does the author recommend to his Prussian colleagues?

(see the answer keys)

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