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

Multiple Choice Questions

1. What led Michael Burry to leave his original profession and become a money manager?
(a) His father's death.
(b) His son's birth.
(c) His daughter's birth.
(d) His wife's death.

2. In Chapter 5, Charlie Ledley and Jamie Mai continued to make risky investments until they had grown their investment company to how much?
(a) $200 million.
(b) $30 million.
(c) $75 million.
(d) $10 million.

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

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

5. What does CDO stand for?
(a) Calculated debt options.
(b) Client debt options.
(c) Common debt obligations.
(d) Collateralized debt obligations.

6. 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?
(a) Deutsche Bank.
(b) Wachovia.
(c) Standard & Poor's.
(d) The Fitch Group.

7. 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) FICO scores.
(c) Insider trading.
(d) Hackers.

8. As Steve Eisman's team investigated in Chapter 4, they found patterns in the people and states that what?
(a) Were the most successful.
(b) Suffered the highest default rates.
(c) Had warmer climates.
(d) Were more educated.

9. Who began taking the bottom tranches of their mortgage bonds and packaging them together to create CDOs in Chapter 3?
(a) Goldman Sachs.
(b) Cornwall Capital Management.
(c) Scion Capital.
(d) Standard & Poor's.

10. Where did Steve Eisman's wife threaten to move to and raise chickens in Chapter 1?
(a) Rhode Island.
(b) Delaware.
(c) Maine.
(d) Vermont.

11. With Ben Hockett's help, Cornwall received a contract which allowed them to buy what?
(a) ISDAs.
(b) FICOs.
(c) CDOs.
(d) CDSs.

12. Where did Michael Lewis earn his Masters degree in Economics?
(a) The Paris School of Economics.
(b) The Chicago School of Economics.
(c) The New York School of Economics.
(d) The London School of Economics.

13. During their research, Ledley and Mai discovered that many CDOs were comprised of triple-B rated mortgages being sold as what?
(a) Triple-A.
(b) Triple-C.
(c) Double-C.
(d) Double-B.

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

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

Short Answer Questions

1. Who agreed to a $5 million dollar deal with Michael Burry in Chapter 2?

2. For what company did Michael Lewis begin working after earning his Masters degree in Economics?

3. The woman who stated that her supervisors picked and chose which mortgage bonds would be triple-A rated despite her frequent recommendations that most of them be downgraded worked for what company in Chapter 4?

4. With whose assistance did Steve Eisman publish a report outlining the bad practices of the subprime mortgage lender in Chapter 1?

5. Who thought that if AIG stopped buying the bonds, the subprime mortgage bond market would collapse, making him a fortune in Chapter 3?

(see the answer keys)

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