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

Multiple Choice Questions

1. According to the author, the Tea Party distracts its followers from the real villains of Wall Street by convincing itself that what is the enemy?
(a) Alan Greenspan.
(b) Big government.
(c) Capitalism.
(d) Free-market economics.

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

3. What are created when banks split their mortgage loan payments into three levels and sell them in separate packages?
(a) Tranch blocks.
(b) Derivatives.
(c) Collectives.
(d) Incidentals.

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

5. 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) $100.
(b) $200.
(c) $500.
(d) $300.

6. When was Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History published?
(a) December, 2009.
(b) October, 2009.
(c) September, 2011.
(d) September, 2008.

7. During what years was Ronald Reagan President of the United States?
(a) 1971-1978.
(b) 1979-1985.
(c) 1981-1989.
(d) 1982-1990.

8. What refers to a form of government in which engineers, scientists, health professionals, and other technical experts are in control of decision making in their respective fields?
(a) Socialist democracy.
(b) Plurocracy.
(c) Democracy.
(d) Technocracy.

9. What refers to an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities?
(a) Federal Reserve.
(b) Bond market.
(c) Treasury market.
(d) Stock exchange.

10. 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) Stock portfolio.
(c) Credit fund.
(d) Derivatives fund.

11. Since 2002, Deutsche Bank's Chief Executive Officer and Chairman of the Group Executive Committee has been __________.
(a) Joel Hosey.
(b) Jan Leys.
(c) Josef Ackermann.
(d) Michel Slosovik.

12. 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?
(a) Derivitaves market.
(b) Ponzi scheme.
(c) Unsubsidized loans.
(d) Subsidized market.

13. In 2002, less than how much worth of subprime loans was approved?
(a) $200 billion.
(b) $100 billion.
(c) $1 billion.
(d) $300 million.

14. The Bear Stearns Companies, Inc. was based in what US city?
(a) Seattle.
(b) New York.
(c) Los Angeles.
(d) Chicago.

15. Who was Vice President to Richard Nixon?
(a) Ronald Reagan.
(b) Lyndon Johnson.
(c) George H. Bush.
(d) Spiro Agnew.

Short Answer Questions

1. What involves an exchange of the defaulted loan instrument (and with it the right to recover the default loan at some later time) for immediate money - usually the face value of the loan?

2. AIG was listed on the Dow Jones Industrial Average from _________ to September 22, 2008.

3. Where did Alan Greenspan earn a B.S. degree in economics summa cum laude?

4. What refers to a public entity for the trading of company stock and derivatives at an agreed price?

5. What does AIG stand for?

(see the answer keys)

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