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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. Ronald O. Perelman is a hostile trader who took over which cosmetics company?

2. According to the author, investors don't fear losing money as much as they fear _____?

3. The market settles on a fair value of CMOs by comparing them with corporate and _____ bonds.

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

5. How much debt does the savings and loan companies seem to want to sell 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. When is the best time to sell short?

3. What is the relationship of IOs and POs to the market?

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

5. What is the "gospel according to Ranieri"?

6. How does Bear Stearns take the $250 million loss that Howie Rubin incurs at Merrill Lynch?

7. Who took the hit for the AT&T bond loss that the author advised Herman on?

8. What are the two kinds of friction at Salomon Brothers?

9. What characterizes Stu Willicker's leadership style?

10. Despite the upheaval in the mortgage market, what is the initial objection that remains valid as the mortgage market evolves?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

What is the quickest way to be fired from Salomon Brothers? Why? How does Gutfreund act contrary to this unwritten rule? How does he get away with it?

Essay Topic 2

Describe the deal that the author and Alexander create on the security they invent involving German interest rates. How does the "the opportunist" offer to help them? How does "the opportunist" try to take credit for their idea? How does the author retaliate and what is the final outcome of the situation?

Essay Topic 3

Describe the training program at Salomon Brothers. How is it perceived by other firms? What is the difference between the people who sit in the front row and the people who sit in the back row of the training sessions? How are the Japanese trainees perceived? How do they perceive themselves? To which speaker does the back row respond favorably? Why?

(see the answer keys)

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