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

Multiple Choice Questions

1. Ranieri owns exactly four suits, all of them _____.
(a) Rayon.
(b) Polyester.
(c) Wool.
(d) Silk.

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

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

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

5. Ranieri says Bill Voute always has a _____.
(a) Sportscar image.
(b) Need to pick at people.
(c) Biting wit.
(d) Political agenda.

6. Investment banking in America is a long-standing _____.
(a) Monarchy.
(b) Partnership.
(c) Oligopoly.
(d) Dictatorship.

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

8. What is the name of the standard of one hundred cents on the dollar?
(a) Par.
(b) Whole life.
(c) Whole dividend.
(d) Coupon rate.

9. The author observes that Strauss doesn't seem to like Ranieri's lack of _____.
(a) Conviction.
(b) Drive.
(c) Aplomb.
(d) Couth.

10. In Salomon Brothers: Advance to Leadership, Gutfreund is cast as what type of figure?
(a) An Isaiah.
(b) A de Gaulle.
(c) A Churchill.
(d) A messiah.

11. A sticking point in making mortgage securities work is the homeowner's right to _____ his mortgage.
(a) Prepay.
(b) Appropriate.
(c) Default on.
(d) Sell.

12. The quote in "The Art of War" that captures the essence of the chapter is "God gave you eyes, _____."
(a) Plot their demise.
(b) Look ahead.
(c) Plagiarize.
(d) Watch your back.

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

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

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

Short Answer Questions

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

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

3. Ranieri tells Gutfreund that he is selling the [mortgage bond] technology for a _____.

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

5. Ranieri is the guru of the _____ industry.

(see the answer keys)

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