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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

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

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

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

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

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

Short Answer Questions

1. According to one mortgage trader, it is an accepted fact that mortgage traders have _____.

2. What author does the author recommend to his Prussian colleagues?

3. What is Latin for "buyer beware"?

4. The author considers Bill Voute a _____.

5. What type of help does Congress give thrifts in 1981?

Short Essay Questions

1. Why does one trader think that Mark Smith is not a Trojan Horse like some of the other traders believe?

2. Does Michael Milken consider himself a part of Drexel Burnham?

3. What is drifting away from Salomon Brothers and toward Drexel Burnham in 1987? Why?

4. Why do costs at Salomon Brothers seem to suddenly matter in 1985?

5. What happens to the average age and the average age at Salomon Brothers in London in 1987?

6. Do bosses at Salomon Brothers think badly of employees who are not at their telephones all the time? Why or why not?

7. What is the particular need of thrifts in terms of investing in the mortgage bond market?

8. What is happening in colleges in Britain by the end of 1986?

9. From the moment the Federal Reserve lifted interest rates in October 1979, what happens to the thrifts?

10. When is the best time to sell short?

(see the answer keys)

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