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

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 test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. At what age was Michael Lewis when he was shocked that Wall Street would allow him to buy and sell stocks, as described in the Prologue?

2. What does CDO stand for?

3. What companies approached Michael Burry and provided him with capital to begin his new company?

4. What are divisions of mortgage bonds in which the mortgage bonds are divided into pieces?

5. In whose garage did Charlie Ledley begin operating a hedge fund in Chapter 5?

Short Essay Questions

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

2. How do stocks and bonds differ in trading?

3. How did Charlie Ledley's first investment pay out? What was the company's worth?

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

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

6. How are tranches differentiated in mortgage bonds?

7. What was AIG FP's role in the stock market crash, as described in Chapter 3?

8. What "expert" did Greg Lippmann bring to speak with Steve Eisman in Chapter 3? Why?

9. How are AIG FP's actions described in Chapter 3?

10. What did Steve Eisman's team conclude after analyzing the mortgage data in Chapter 4?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Describe Michael Burry's tactics in establishing Scion Capital. Where did Burry find investors and what did they think of his approach to trading?

Essay Topic 2

Describe the personality of Steve Eisman as detailed in the book. What characteristics made Eisman fit for the world of Wall Street?

Essay Topic 3

Describe FICO and the role of rating systems in the mortgage crisis. From whom did Eisman make the discoveries about the ratings companies?

(see the answer keys)

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