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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 3: Hot Potato, The Great American Mortgage Scam.

Multiple Choice Questions

1. What refers to a market for securities (debt or equity), where business enterprises and governments can raise long-term funds?
(a) Derivatives market.
(b) Subsidy market.
(c) Bond market.
(d) Capital market.

2. For what magazine was Matt Taibbi working as a reporter when he describes having listened to the acceptance speech of Sarah Palin in Chapter 1?
(a) The New Yorker.
(b) Rolling Stone.
(c) Men's Journal.
(d) Wall Street Journal.

3. Eljon Williams had what profession?
(a) Sanitation worker.
(b) Banker.
(c) Pianist.
(d) Sheriff's deputy.

4. In finance, what occurs whenever the loan payment for any period is less than the interest charged over that period so that the outstanding balance of the loan increases?
(a) Positive securitization.
(b) Inverted amortization.
(c) Negative securitization.
(d) Negative amortization.

5. When was Ronald Reagan born?
(a) 1911.
(b) 1919.
(c) 1930.
(d) 1925.

Short Answer Questions

1. What refers to a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation?

2. When did Alan Greenspan earn his doctorate in economics?

3. What refers to a financial market where participants can issue new debt, known as the Primary market, or buy and sell debt securities, known as the Secondary market, usually in the form of bonds?

4. In Chapter 3, what process in which loans are split up and sold off to secondary investors as securities was used by banks?

5. When was Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History published?

(see the answer key)

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