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

Multiple Choice Questions

1. Steve Roth and Scott Brittenham make millions of dollars trading _____.
(a) Junk securities.
(b) Federal project loans.
(c) Small Business Administration loans.
(d) Corporate bonds.

2. What is the word that means trading riskily for profit?
(a) Swapping.
(b) Arbitrage.
(c) Arbitration.
(d) Selling short.

3. The market settles on a fair value of CMOs by comparing them with corporate and _____ bonds.
(a) Municipal.
(b) Junk.
(c) Treasury.
(d) School.

4. Tokyo is seemingly the obvious site for Salomon Brothers' global expansion because of Japan's _____.
(a) Money-making machine.
(b) Financial regulations..
(c) Trade surplus.
(d) Work ethic.

5. Mike Milkin of Drexel Burnham is the guru of _____.
(a) Junk bonds.
(b) Government bonds.
(c) Mortgage bonds.
(d) Municipal bonds.

6. Which company becomes Salomon Brothers' biggest competitor soon after mortgage trading becomes a viable investment entity?
(a) Goldman Sachs.
(b) Drexel Burnham.
(c) Merril Lynch.
(d) First Boston.

7. A carnival performer who bites the heads off live chickens and snakes is definition of a _____.
(a) Nerd.
(b) Freak.
(c) Stooge.
(d) Geek.

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

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

10. According to the author, what is a symbol of Britain's long economic decline?
(a) Sagging thin black socks.
(b) Going beltless.
(c) Meatless Mondays.
(d) The low price of liquor.

11. Salomon Brothers is a ______ from 1910 to 1981.
(a) Partnership.
(b) Corporation.
(c) Monopoly.
(d) Sole proprietorship.

12. What author does the author recommend to his Prussian colleagues?
(a) Sun-Tzu.
(b) Dale Carnegie.
(c) John Suskind.
(d) Anthony Robbins.

13. Gutfreund is treated like a _____ in London.
(a) Gauche American tourist.
(b) Brother.
(c) Crazy uncle.
(d) King.

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

15. To create a CMO, hundreds of millions of dollars in ordinary mortgage bonds are placed in a _____.
(a) Pension fund.
(b) Retirement account.
(c) Certificate of Deposit.
(d) Trust.

Short Answer Questions

1. The author considers Bill Voute a _____.

2. What type of ideas does Herman want for his investment?

3. What is the expression that describes a customer who has gone under as a result of a trade?

4. What type of communication do the author and Dash launch into at the beginning of the work day?

5. By getting thrift managers to trade their bonds actively, Ranieri's sales force could transform a shy, nervous thrift president into a _____.

(see the answer keys)

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