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

Multiple Choice Questions

1. When did Steve Eisman publish a report outlining the bad practices of the subprime mortgage lender in Chapter 1?
(a) 1997.
(b) 1988.
(c) 1994.
(d) 1990.

2. What does AIG FP stand for?
(a) American International Group Fiscal Products.
(b) American Investment Group Financial Portfolios.
(c) American International Group Financial Products.
(d) American Investment Group Financial Portfolios.

3. In Michael Burry's first credit default swap, he bought how many bonds?
(a) 15.
(b) 6.
(c) 10.
(d) 12.

4. An investment corporation needs a contract through what in order to trade in securities that are traditionally only bought and sold between large investing bodies?
(a) COMA.
(b) IMDB.
(c) USDA.
(d) ISDA.

5. What is a collection of one hundred different mortgage bonds, usually the riskiest that are combined to create a new group of bonds that could take the low rated bonds and reclassify them at a higher rate?
(a) Tranches.
(b) Collateral debt obligation.
(c) FICO Scores.
(d) Credit default swap.

Short Answer Questions

1. Who offered Michael Burry bonds at $100 million a deal in Chapter 2?

2. Michael Burry could not bet against mortgage bonds in the same way he could other bonds because he could not short houses, only what?

3. What companies approached Michael Burry and provided him with capital to begin his new company?

4. The sale of CDSs grew AIG FP so quickly that it provided what percent of AIG's profits in Chapter 3?

5. Steve Eisman discovered that what company was fraudulently selling fifteen year mortgages under the guise of thirty year mortgages?

(see the answer key)

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