|Name: _________________________||Period: ___________________|
This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.
Short Answer Questions
1. In Salomon Brothers: Advance to Leadership, Gutfreund is cast as what type of figure?
2. Ronald O. Perelman is a hostile trader who took over which cosmetics company?
3. According to the author, what is a symbol of Britain's long economic decline?
4. The ____ outlook of traders enables traders to exploit the weakness of their customers with virtual impunity.
5. The Salomon Brothers expense account is used as a _____ compensation system.
Short Essay Questions
1. Why does one trader think that Mark Smith is not a Trojan Horse like some of the other traders believe?
2. Despite the upheaval in the mortgage market, what is the initial objection that remains valid as the mortgage market evolves?
3. Why do thrifts come back for more, even though they don't understand what is happening to their loans in the mortgage bond market?
4. From the moment the Federal Reserve lifted interest rates in October 1979, what happens to the thrifts?
5. Do bosses at Salomon Brothers think badly of employees who are not at their telephones all the time? Why or why not?
6. As the author gains more experience working in London, what does he think interests European traders that differs from American traders?
7. How is Howie Rubin thought of at Salomon Brothers? Why?
8. What is the "gospel according to Ranieri"?
9. What are the two kinds of friction at Salomon Brothers?
10. What are some of the bad habits mortgage traders have developed regarding the use of the Salomon Brothers expense account?
Write an essay for ONE of the following topics:
Essay Topic 1
What contributes to the rapid and complete deterioration of Ranieri and Co. at Salomon Brothers? What was the achievement that Ranieri had hoped for in creating the mortgage department? How did the market affect the imbalance between Ranieri and Co. and the rest of the bond trading world?
Essay Topic 2
Describe the inherent contradictions in John Gutfreund's compensation system. What are the criteria for compensation at Salomon Brothers? Who does he lose as a result of his system? How does this snowball into a bigger problem? Who negotiates a better salary by threatening to leave the company? What reaction does this get from the rest of the company?
Essay Topic 3
According to Andy Stone, what effect does Wall Street's tendency to make its best producers into managers have on firms? What happens to managers once they achieve the position? Is it a good system overall?
This section contains 845 words
(approx. 3 pages at 300 words per page)