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This quiz consists of 5 multiple choice and 5 short answer questions through Chapters 4-5.

Multiple Choice Questions

1. What are bonds that are made up of mortgages sold to consumers by banks?
(a) Mortgage bonds.
(b) Subprime bonds.
(c) Mortgage rate stocks.
(d) Optimum bonds.

2. The sale of CDSs grew AIG FP so quickly that it provided what percent of AIG's profits in Chapter 3?
(a) 35.
(b) 15.
(c) 25.
(d) 20.

3. What are divisions of mortgage bonds in which the mortgage bonds are divided into pieces?
(a) Credit default swap.
(b) FICO Scores.
(c) Collateral debt obligation.
(d) Tranches.

4. What is the name of the investment group begun by Charlie Ledley and his partner in Chapter 5?
(a) FrontPoint.
(b) Scion Capital.
(c) Cornwall Capital Management.
(d) Capital One Financial.

5. Who agreed to a $5 million dollar deal with Michael Burry in Chapter 2?
(a) Scion Capital
(b) Bank of America.
(c) Goldman Sachs.
(d) Cornwall Capital Management.

Short Answer Questions

1. In Michael Burry's first credit default swap, he bought how many bonds?

2. Where did Michael Lewis grow up?

3. What is often referred to as a form of insurance that protects a lender if a borrower of capital defaults on a loan?

4. In what year did Steve Eisman stop working as an analyst and start his own hedge fund?

5. With Ben Hockett's help, Cornwall received what contract?

(see the answer key)

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