The Big Short: Inside the Doomsday Machine Test | Mid-Book Test - Easy

Michael Lewis (author)
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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. Through the use of what, was Michael Burry guaranteed to only lose only the amount of the premium payments in Chapter 2?
(a) CDOs.
(b) ISDAs.
(c) CDSs.
(d) Tranches.

2. Who went to a conference of subprime mortgage bond professionals and learned from a woman that her supervisors picked and chose which mortgage bonds would be triple-A rated despite her frequent recommendations that most of them be downgraded?
(a) Ernestine Warner.
(b) Vincent Daniel.
(c) Steve Eisman.
(d) Jamie Mai.

3. In criminal law, what is an intentional deception made for personal gain or to damage another individual?
(a) Fraud.
(b) Heresy.
(c) Contempt.
(d) Embezzlement.

4. What had Steve Eisman studied in college?
(a) Corporate law.
(b) International trade.
(c) South American history.
(d) Art history.

5. When was Michael Lewis' first book published?
(a) 1989.
(b) 1985.
(c) 1979.
(d) 1983.

6. Who thought that if AIG stopped buying the bonds, the subprime mortgage bond market would collapse, making him a fortune in Chapter 3?
(a) Michael Lewis.
(b) Euguene Xu.
(c) Meredith Whitney.
(d) Greg Lippman.

7. Meredith Whitney was an analyst of financial firms for what company in 2007?
(a) Citigroup.
(b) Oppenheimer and Co.
(c) Salomon Brothers.
(d) Household Finance Corporation.

8. Steve Eisman got his job with Oppenheimer and Co. through whom?
(a) His neighbor.
(b) A friend from college.
(c) His uncle..
(d) His parents.

9. Steve Eisman's team discovered in Chapter 4 that the mortgage lenders were using what to alter the rating of their bonds?
(a) Bad math.
(b) Hackers.
(c) Insider trading.
(d) FICO scores.

10. What is a global financial service company with its headquarters in Frankfurt, Germany?
(a) The Fitch Group.
(b) Oppenheimer and Co.
(c) Morgan Stanley.
(d) Deutsche Bank.

11. Where did Michael Burry begin cataloging his investments and their results, which drew interest from Wall Street brokers without Burry's knowledge?
(a) A magazine.
(b) A newspaper.
(c) A blog.
(d) A library.

12. 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?
(a) Credit default swap.
(b) Tranches.
(c) FICO Scores.
(d) Collateral debt obligation.

13. With Ben Hockett's help, Cornwall received a contract which allowed them to buy what?
(a) ISDAs.
(b) FICOs.
(c) CDOs.
(d) CDSs.

14. Michael Burry could not bet against mortgage bonds in the same way he could other bonds because he could not short houses, only what?
(a) House builders.
(b) Commercial buildings.
(c) Government buildings.
(d) Construction workers.

15. In finance, what occurs when a debtor has not met his or her legal obligations according to the debt contract?
(a) Repossesion.
(b) Default.
(c) Forclosure.
(d) Refinancing.

Short Answer Questions

1. What Chinese national who came in second in a math competition in China accompanied Greg Lippmann in Chapter 3?

2. What is the name of the investment group begun by Charlie Ledley and his partner in Chapter 5?

3. What is the name of the investment group Steve Eisman formed after quitting his job as a bond analyst?

4. What is often referred to as a form of insurance that protects a lender if a borrower of capital defaults on a loan?

5. The alterations to bond ratings made by mortgage lenders in Chapter 4 led to such things as lending how much money to a migrant worker who made only $14,000 a year?

(see the answer keys)

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