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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. The assignment of Jamie Dimon and a dozen of his rival CEOs at the emergency meeting at the Federal Reserve Bank of New York was to come up with a plan to save what company, according to the author in the Prologue?
(a) JP Morgan
(b) Berkshire Hathaway
(c) Merrill Lynch
(d) Lehman Brothers

2. In 2008, AIG had grown into one of the world’s largest financial companies, with a market value of just under how much?
(a) $35 billon
(b) $80 billion
(c) $50 billion
(d) $125 billion

3. According to the author in Chapter 5, David Einhorn was a hedge manager controlling over how much money in assets?
(a) $6 billion
(b) $12 billion
(c) $3 billion
(d) $10 billion

4. Who did Bob Willumstad refer to as the former Chairman at AIG that thought Willumstad’s position was all or nothing in Chapter 8?
(a) John Thain
(b) Frank Zarb
(c) Skip McGee
(d) David Faber

5. Where was Hank Paulson born?
(a) Billings, MT
(b) Palm Beach, FL
(c) Knoxville, TN
(d) Des Moines, IA

Short Answer Questions

1. Dick Fuld and who called Warren Buffett to ask him to consider investing in Lehman Brothers, according to the author in Chapter 2?

2. Gerald Donini asserts when speaking with Jim Cramer in Chapter 5 that he felt the real problem in the marketplace wasn’t short-selling, but what?

3. Hank Paulson and his staff prepared a secret plan for how to deal with the situation in Chapter 4. Their plan proposed that should the banks fail, the Treasury Department would purchase up to how many of the bad assets of the banks in order to stabilize the market?

4. According to the author in Chapter 1, Henry Paulson called and informed Dick Fuld that Bear Stearns collapsed and would be bought by what investment company?

5. Hank Paulson and his staff prepared a secret plan for how to deal with the situation should Lehman or another large firm go bankrupt, or if several banks should begin to fail at once. Who did they present their plan to in a meeting described by Sorkin in Chapter 4?

Short Essay Questions

1. Why did Dick Fuld meet with other Lehman executives and Jim Cramer in Chapter 5? How did this meeting turn out?

2. Who did Bob Willumstad replace as CEO of AIG? How does the author describe Hank Greenberg’s thoughts on this transition in Chapter 8?

3. What was Hank Paulson’s first concern regarding the possibility of failure of Lehman Brothers, according to the author in Chapter 4?

4. How does Andrew Ross Sorkin explain the underlying cause of the sub-prime mortgage crisis of 2008 in the Prologue of Too Big to Fail?

5. What was the result of spreading sub-prime mortgages across the spectrum of the investment world, according to the author in the Prologue?

6. What did Jamie Dimon inform his executive staff after attending the meeting described in the Prologue?

7. What was John Thain’s plan for turning around Merrill Lynch after his acceptance of the role as CEO in Chapter 7?

8. Who did Bob Steel contact to discuss the Lehman Brothers problem in Chapter 4? What response did he get?

9. What suggestion did Hank Paulson make to Dick Fuld regarding Lehman Brothers’ holdings in Chapter 2? How did Fuld respond?

10. How was Hank Paulson’s rise to the post of Treasury Secretary described in Chapter 2?

(see the answer keys)

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