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

Multiple Choice Questions

1. What is another name for an individual home loan?
(a) A window loan.
(b) A whole loan.
(c) A windfall advantage loan.
(d) A hammer loan.

2. On Wall Street, there is no theoretical basis for pricing a homeowner's option to _____ his loan.
(a) Refinance.
(b) Default on.
(c) Repay.
(d) Inflate.

3. What is the name of the Federal Housing Administration's approval to trade in whole loans?
(a) A bogey.
(b) A birdie.
(c) An eagle.
(d) A put.

4. Ranieri describes Tom Strauss as _____.
(a) A clown.
(b) A snake.
(c) A rabid dog.
(d) A boob.

5. "The opportunist" is sane in every respect except that his _____ was stratospheric.
(a) Accumulated debt.
(b) Self-importance.
(c) Self-loathing.
(d) Accumulated wealth.

6. What type of ideas does Herman want for his investment?
(a) Ancient.
(b) Gut.
(c) Current.
(d) Smart.

7. According to the author, the whole idea of globalization at Salomon Brothers is _____.
(a) A given.
(b) Somewhat realisitic.
(c) A canard.
(d) A relief.

8. Who are the biggest shoppers for mortgage products?
(a) Foreign investors.
(b) Thrifts.
(c) Homeowners.
(d) Government agencies.

9. What is the biggest most expensive real estate project in Manhattan on which Salomon Brothers bails out at a $107 million loss?
(a) The Long Island Bridge.
(b) Crystal Island.
(c) Columbus Circle.
(d) The Manhattan Project.

10. Drexel Burnham runs an ad in the Wall Street journal showing two men _____.
(a) Eating fast food.
(b) Running up a hill.
(c) On a tandem bicycle.
(d) At a boxing match.

11. What is jargon for a gamble that is sure to succeed?
(a) A touchdown.
(b) A field goal.
(c) A lay-up.
(d) A home run.

12. What are the European genus, English species, of slick financial people called?
(a) Rakes.
(b) Spivs.
(c) Snakes.
(d) Donkeys.

13. According to one mortgage trader, it is an accepted fact that mortgage traders have _____.
(a) Iron balls.
(b) No consciences.
(c) Death wishes.
(d) Fishy eyes.

14. The ____ outlook of traders enables traders to exploit the weakness of their customers with virtual impunity.
(a) Short-term.
(b) Narrow.
(c) Long-term.
(d) Wide.

15. What ritual of the London office is fairly renowned in New York?
(a) Two-hour lunches.
(b) Working late hours.
(c) Wine at work.
(d) Going to France on the weekends.

Short Answer Questions

1. According to the author, what is the rarest and most valuable asset a Wall Street firm can possess?

2. What is Latin for "buyer beware"?

3. What is it called when a trader offloads bonds down a customer's throat for the company's benefit?

4. Salomon Brothers is a ______ from 1910 to 1981.

5. The pet name that bond traders give to the corporate finance department is _____.

(see the answer keys)

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