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

Michael Lewis (author)
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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. Who from Deutsche Bank asked if they could buy the swaps back from Michael Burry in Chapter 2?
(a) Michael Lewis.
(b) Meredith Whitney.
(c) Greg Lippman.
(d) Euguene Xu.

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) Jamie Mai.
(b) Ernestine Warner.
(c) Vincent Daniel.
(d) Steve Eisman.

3. Michael Burry worked as a resident in what field in Chapter 2?
(a) Cardiology.
(b) Neurology.
(c) Proctology.
(d) Optometry.

4. 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?
(a) $500 thousand.
(b) $350 thousand.
(c) $150 thousand.
(d) $700 thousand.

5. What refers to a cumulative number that suggests a consumer's credit risk?
(a) FICO Score.
(b) Collateral debt obligation.
(c) Tranches.
(d) Credit default swap.

Short Answer Questions

1. In criminal law, what is an intentional deception made for personal gain or to damage another individual?

2. Steve Eisman's team discovered in Chapter 4 that the mortgage lenders were using what to alter the rating of their bonds?

3. What is a legal document that institutions and businesses use to describe the securities they are offering for participants and buyers?

4. The woman who stated that her supervisors picked and chose which mortgage bonds would be triple-A rated despite her frequent recommendations that most of them be downgraded worked for what company in Chapter 4?

5. What led Michael Burry to leave his original profession and become a money manager?

Short Essay Questions

1. How did Steve Eisman come to work for Oppenheimer Co.? How is he described?

2. What led Steve Eisman to open his own hedge fund?

3. What did Ledley and Mai discover about CDOs and CDSs in Chapter 5?

4. How did Cornwall Capital Management secure an ISDA? What did this mean for the company?

5. What did Goldman Sachs begin doing with their bottom tranches in Chapter 3?

6. What intrigued Steve Eisman about CDSs in Chapter 3?

7. How did Greg Lippmann go about finding investors in Chapter 3?

8. How did Charlie Ledley enter the bond market in Chapter 5?

9. How does the author describe his impressions of Wall Street when he began working there in Chapter 1?

10. How are tranches differentiated in mortgage bonds?

(see the answer keys)

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