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

Multiple Choice Questions

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

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

3. 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) Vincent Daniel.
(b) Ernestine Warner.
(c) Jamie Mai.
(d) Steve Eisman.

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

5. How much money did Charlie Ledley and Jamie Mai make from their first major investment in a company with legal trouble in Chapter 5?
(a) Over $5 million.
(b) Over $500,000.
(c) Over $1 million.
(d) Over $3 million.

6. With whom did Michael Burry make his first credit default swap?
(a) Deutsche Bank.
(b) Scion Capital.
(c) Oppenheimer and Co.
(d) Cornwall Capital Management.

7. What refers to loans made to customers with less than perfect credit?
(a) Gambles.
(b) Subprime.
(c) High interest.
(d) CDS's.

8. Who from Deutsche Bank asked if they could buy the swaps back from Michael Burry in Chapter 2?
(a) Meredith Whitney.
(b) Euguene Xu.
(c) Michael Lewis.
(d) Greg Lippman.

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

10. What is the name of the investment group Steve Eisman formed after quitting his job as a bond analyst?
(a) FrontPoint.
(b) Cornwall Capital Management.
(c) Scion Capital.
(d) Deutsche Bank.

11. How old was Charlie Ledley when he moved to California to create a hedge fund?
(a) 18.
(b) 27.
(c) 21.
(d) 30.

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

13. By what year had Steve Eisman gathered a group of investors around himself filled with people who believed as he did that no one on Wall Street knew what they were doing, as described in Chapter 1?
(a) 2001.
(b) 2005.
(c) 1999.
(d) 2007.

14. Michael Burry lost his left eye due to what as a toddler?
(a) A car accident.
(b) Cancer.
(c) Asperger's Syndrome.
(d) Glaucoma.

15. Gene Park worked in offices where in Chapter 4?
(a) Rhode Island.
(b) Maine.
(c) Virginia.
(d) Connecticut.

Short Answer Questions

1. Through the use of what, was Michael Burry guaranteed to only lose only the amount of the premium payments in Chapter 2?

2. With the creation of ______, mortgage companies became inspired to grow quickly and offer a great many loans to customers.

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

4. Where did Michael Lewis work as a bond salesman after earning his Masters degree in Economics?

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

(see the answer keys)

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