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This quiz consists of 5 multiple choice and 5 short answer questions through Chapters 2-3.

Multiple Choice Questions

1. On what date did the head of the International Monetary Fund warn that the world financial system was teetering on the "brink of systemic meltdown"?
(a) October 11, 2008.
(b) March 4, 2006.
(c) June 28, 2007.
(d) August 15, 2009.

2. What refers to loans made to customers with less than perfect credit?
(a) Subprime.
(b) High interest.
(c) CDS's.
(d) Gambles.

3. With whose assistance did Steve Eisman publish a report outlining the bad practices of the subprime mortgage lender in Chapter 1?
(a) Greg Lippmann's.
(b) Michael Lewis'.
(c) Vincent Daniel's.
(d) Meredith Whitney's.

4. What is often referred to as a form of insurance that protects a lender if a borrower of capital defaults on a loan?
(a) Credit default swap.
(b) FICO Scores.
(c) Tranches.
(d) Collateral debt obligation.

5. In Michael Burry's first credit default swap, what was the rate of each bond purchased?
(a) $7 million.
(b) $1 million.
(c) $3 million.
(d) $10 million.

Short Answer Questions

1. Where did Michael Lewis earn his Masters degree in Economics?

2. What is a legal document that institutions and businesses use to describe the securities they are offering for participants and buyers?

3. What does CDO stand for?

4. Who from Deutsche Bank asked if they could buy the swaps back from Michael Burry in Chapter 2?

5. By what year had Steve Eisman gathered a group of investors around himself filled with people who believed as he did that no one on Wall Street knew what they were doing, as described in Chapter 1?

(see the answer key)

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