The Big Short: Inside the Doomsday Machine Quiz | Four Week Quiz A

Michael Lewis (author)
This set of Lesson Plans consists of approximately 132 pages of tests, essay questions, lessons, and other teaching materials.
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This quiz consists of 5 multiple choice and 5 short answer questions through Chapters 2-3.

Multiple Choice Questions

1. On what date did the head of the International Monetary Fund warn that the world financial system was teetering on the "brink of systemic meltdown"?
(a) March 4, 2006.
(b) June 28, 2007.
(c) October 11, 2008.
(d) August 15, 2009.

2. In Michael Burry's first credit default swap, what was the rate of each bond purchased?
(a) $7 million.
(b) $3 million.
(c) $10 million.
(d) $1 million.

3. What does CDO stand for?
(a) Common debt obligations.
(b) Collateralized debt obligations.
(c) Client debt options.
(d) Calculated debt options.

4. What are bonds that are made up of mortgages sold to consumers by banks?
(a) Mortgage bonds.
(b) Optimum bonds.
(c) Mortgage rate stocks.
(d) Subprime bonds.

5. By what year had Steve Eisman gathered a group of investors around himself filled with people who believed as he did that no one on Wall Street knew what they were doing, as described in Chapter 1?
(a) 1999.
(b) 2001.
(c) 2005.
(d) 2007.

Short Answer Questions

1. What does CDS stand for?

2. In Chapter 3, soon all the CDSs AIG FP sold consisted primarily of what?

3. What is a collection of one hundred different mortgage bonds, usually the riskiest that are combined to create a new group of bonds that could take the low rated bonds and reclassify them at a higher rate?

4. What refers to loans made to customers with less than perfect credit?

5. In 2007, Meredith Whitney announced that what company had so mismanaged its affairs that it would slash its dividend or crash?

(see the answer key)

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