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

Multiple Choice Questions

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

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

3. CMO's are divided into slices, or _____.
(a) Branches.
(b) Compartments.
(c) Departments.
(d) Tranches.

4. What do rating services rely exclusively on to assess a company's creditworthy status?
(a) The future.
(b) The present.
(c) Its earnings.
(d) The past.

5. Ranieri is the guru of the _____ industry.
(a) Dream.
(b) Restaurant.
(c) Thrift.
(d) Junk bond.

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

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

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

9. What type of communication do the author and Dash launch into at the beginning of the work day?
(a) Stream of consciousness.
(b) Sign language.
(c) Maniacal.
(d) Slow and deliberate.

10. Lewis characterizes the sprinting rabbit statue at the new London office as a _____.
(a) Frivolous trinket.
(b) Reminder to work hard.
(c) Caveat emptor.
(d) Non sequitur.

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

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

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

14. In New York, when a trader is starting out, the excitement of being part of the action comes at the price _____.
(a) Freedom.
(b) One's sanity.
(c) A few million dollars.
(d) One's soul.

15. Where does Dash see a painting that he wants?
(a) The Metropolitan Museum.
(b) Christie's.
(c) Bonham's.
(d) Sotheby's

Short Answer Questions

1. Michael Milken invents the _____.

2. How much debt does the savings and loan companies seem to want to sell in 1981?

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

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

5. What fund goes from zero investment in the mortgage market in 1983 to thirty billion dollars worth of CMOs in 1986?

(see the answer keys)

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