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

Multiple Choice Questions

1. 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.

2. When was Michael Lewis' first book published?
(a) 1983.
(b) 1979.
(c) 1989.
(d) 1985.

3. Michael Burry worked as a resident in what field in Chapter 2?
(a) Neurology.
(b) Optometry.
(c) Proctology.
(d) Cardiology.

4. In Chapter 5, Ledley and Mai bought multi-million dollar triple-A CDOs rather than the triple-B CDOs who had purchased?
(a) Cassano and Burry.
(b) Burry and Eisman.
(c) Lippmann and Cassano.
(d) Lippmann and Xu.

5. When Cornwall Capital Management moved to Bear Sterns, their account was handled by whom?
(a) Michael Lewis.
(b) Steve Eismann.
(c) Lewis Ranieri.
(d) Ace Greenburg.

6. What refers to a cumulative number that suggests a consumer's credit risk?
(a) FICO Score.
(b) Tranches.
(c) Credit default swap.
(d) Collateral debt obligation.

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

8. What is the title of Chapter 4?
(a) The Mortgage Harvest.
(b) Migrant Workers in Beverly Hills.
(c) How to Harvest a Migrant Worker.
(d) My Work in Mortgages.

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

10. What is the title of Chapter 5?
(a) A Lucky Fortune.
(b) Accidental Capitalists.
(c) The Blind Investors.
(d) Wall Street Rookies.

11. Where did Michael Lewis work as a bond salesman after earning his Masters degree in Economics?
(a) Berkeley.
(b) London.
(c) Stockholm.
(d) Paris.

12. In a short time, Michael Burry had credit default swaps worth what in subprime mortgage bonds in Chapter 2?
(a) $200 million.
(b) $550 million.
(c) $750 million.
(d) $1 billion.

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

14. 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) August 15, 2009.
(b) October 11, 2008.
(c) June 28, 2007.
(d) March 4, 2006.

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

Short Answer Questions

1. What refers to loans made to customers with less than perfect credit?

2. What is a division of The McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds?

3. Who began taking the bottom tranches of their mortgage bonds and packaging them together to create CDOs in Chapter 3?

4. What majority-owned subsidiary of Fimalac, S.A., is a global rating agency dedicated to providing value beyond the rating through independent and prospective credit opinions, research and data?

5. In Michael Burry's first credit default swap, what was the rate of each bond purchased?

(see the answer keys)

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