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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. Meredith Whitney was an analyst of financial firms for what company in 2007?
(a) Salomon Brothers.
(b) Household Finance Corporation.
(c) Oppenheimer and Co.
(d) Citigroup.

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?
(a) Government buildings.
(b) Construction workers.
(c) Commercial buildings.
(d) House builders.

3. In what year did Steve Eisman stop working as an analyst and start his own hedge fund?
(a) 1988.
(b) 2004.
(c) 1997.
(d) 1992.

4. In Chapter 3, soon all the CDSs AIG FP sold consisted primarily of what?
(a) Gold and silver.
(b) Pork futures.
(c) Auto loans.
(d) Subprime mortgages.

5. Through the use of what, was Michael Burry guaranteed to only lose only the amount of the premium payments in Chapter 2?
(a) CDOs.
(b) CDSs.
(c) Tranches.
(d) ISDAs.

6. Who went to a conference of subprime mortgage bond professionals and learned from a woman that her supervisors picked and chose which mortgage bonds would be triple-A rated despite her frequent recommendations that most of them be downgraded?
(a) Jamie Mai.
(b) Vincent Daniel.
(c) Steve Eisman.
(d) Ernestine Warner.

7. Where did Michael Lewis grow up?
(a) Dallas, Texas.
(b) New Orleans, Louisiana.
(c) Denver, Colorado.
(d) Phoenix, Arizona.

8. Who offered Michael Burry bonds at $100 million a deal in Chapter 2?
(a) Oppenheimer and Co.
(b) Goldman Sachs.
(c) Bank of America.
(d) Deutsche Bank.

9. With Ben Hockett's help, Cornwall received what contract?
(a) CDO.
(b) JRCA.
(c) ISDA.
(d) BYR.

10. Who thought that if AIG stopped buying the bonds, the subprime mortgage bond market would collapse, making him a fortune in Chapter 3?
(a) Michael Lewis.
(b) Euguene Xu.
(c) Meredith Whitney.
(d) Greg Lippman.

11. Steve Eisman's team discovered in Chapter 4 that the mortgage lenders were using what to alter the rating of their bonds?
(a) Bad math.
(b) Hackers.
(c) FICO scores.
(d) Insider trading.

12. What is a legal document that institutions and businesses use to describe the securities they are offering for participants and buyers?
(a) Prospectus.
(b) Syllabus.
(c) Contract.
(d) Terms of Service.

13. When was Michael Burry born?
(a) 1963.
(b) 1960.
(c) 1959.
(d) 1971.

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

15. What had Michael Burry's father warned him to stay away from in Chapter 2?
(a) Fire.
(b) Las Vegas.
(c) Women.
(d) The stock market.

Short Answer Questions

1. In Chapter 5, Ledley and Mai bought multi-million dollar triple-A CDOs rather than the triple-B CDOs who had purchased?

2. What was Michael Lewis' first book?

3. Who was Gene Park's boss in Chapter 4?

4. What are divisions of mortgage bonds in which the mortgage bonds are divided into pieces?

5. After Eisman's published report, there were no more public subprime mortgage lenders by what year, as described in Chapter 1?

(see the answer keys)

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