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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. AIG was listed on the Dow Jones Industrial Average from _________ to September 22, 2008.
(a) April 8, 2004.
(b) August 5, 2003.
(c) September 19, 2005.
(d) March 12, 2008.

2. What was the name of Ayn Rand's circle of intellectuals which was dedicated to relentless self-interest?
(a) "The Circle."
(b) "The Caravan."
(c) "The Collective."
(d) "The Vicious Circle."

3. 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) Negative amortization.
(c) Negative securitization.
(d) Inverted amortization.

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

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

6. Eljon Williams contacted what firm to help him get a home loan with a fixed mortgage?
(a) Merrill Lynch.
(b) Wachovia.
(c) Solomon Edwards.
(d) Goldman-Sachs.

7. The Tea Party movement is an American populist political movement that has sponsored protests and supported political candidates since what year?
(a) 2009.
(b) 2010.
(c) 2008.
(d) 2008.

8. What is a private, actively managed investment fund that utilizes sophisticated strategies in international and/or domestic markets, offsets losses during a market downturn, and/or generates returns higher than traditional stock and bond investments?
(a) Hedge fund.
(b) Derivatives fund.
(c) Credit fund.
(d) Stock portfolio.

9. Eljon Williams and his wife were shocked when their mortgage went up over how much from one month to the next in Chapter 3?
(a) $300.
(b) $200.
(c) $500.
(d) $100.

10. Eljon Williams learned that the firm which helped him obtain a mortgage had gotten a commission of how much money?
(a) $5,000.
(b) $12,000.
(c) $10,000.
(d) $8,000.

11. In what year did Alan Greenspan tell Congress that the risk involved in derivatives was "negligible"?
(a) 1994.
(b) 1987.
(c) 1982.
(d) 1990.

12. Alan Greenspan was born in what area of New York City?
(a) Washington Heights.
(b) Greenwich Village.
(c) Astoria, Queens.
(d) The Upper East Side.

13. By 2005, there was over how much money in subprime loans approved?
(a) $600 billion.
(b) $800 billion.
(c) $300 million.
(d) $500 billion.

14. T-Bills mature in what time?
(a) 10 years or less.
(b) 5 years or more.
(c) 2 years.
(d) 1 year or less.

15. In Chapter 3, what process in which loans are split up and sold off to secondary investors as securities was used by banks?
(a) Amortization.
(b) Authorization.
(c) Securitization.
(d) Derivatives.

Short Answer Questions

1. In Atlas Shrugged, a group of men break off on their own and form __________.

2. Alan Greenspan served as Chairman of the Federal Reserve of the United States during what years?

3. According to the author, the Tea Party believes that the economy is self-correcting as long as commerce and _______ are separated.

4. Alan Greenspan joined the Richard Nixon campaign in what year?

5. Who is the protagonist of Atlas Shrugged?

(see the answer keys)

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